GIFT   OF 


Workmen's   Accident 
Insurance 


in 


Germany 


\ 


A  Scries  of  Articles 

by 
Harold  G,  Villard 


Revised  and  Reprinted 
December,  J9J3 


Workmen's  Accident 
Insurance 

in 

Germany 


A  Series  of  Articles 

by 

Harold  G.  Villard 


Kerised  aad  Reprinted 
December,  19)3 


The  following  articles  are  based  upon  personal  observations  and 
study  in  Germany  during  the  spring  and  summer  of  1913,  and  upon  a 
lengthier  observation  and  study  of  workmen's  compensation  and  in- 
surance laws  throughout  Europe.  While  touching  incidentally  upon 
agricultural  accident  and  sickness  insurance,  they  relate  more  par- 
ticularly to  the  industrial  accident  insurance. 

The  first  edition  of  this  pamphlet,  published  in  October  of  this 
year,  having  been  exhausted,  the  opportunity  has  been  taken  to  add 
the  footnotes  and  to  make  a  few  minor  corrections. 

Translations  of  the  instructive  addresses  by  Prof.  Bernhard  and 
Dr.  Naegeli,  so  often  quoted  in  this  pamphlet,  are  in  course  of  prep- 
aration and  will  soon  be  published. 

205  W.  57th  Street,  New  York.  HAROLD  G.  VILLARD. 

December,  1913. 


CONTENTS 

Page 

German  Social  Insurance  Legislation: 

Its  Disheartening  and  Evil  Effects 5 

Growth  of  Economic  Burden 7 

No  Cure  for  Poverty 7 

Effects  on  General  Health  Questionable 8 

Promotes  Workmen's  Carelessness 9 

Retards  Recovery  from  Sickness  or  Injury 9 

Breeds  Nervous  Diseases 11 

Bad  Moral  Effects 13 

Unfortunate  Change  in  Relations  Between  Doctors  and  Patients 16 

Destroys  Sense  of  Responsibility 16 

Conclusion — Germany  Awakening  to  Mistakes 17 

German  Accident  Compensation  Law: 

Experience  and  Statistics 21 

The  Industrial  Accident  Insurance 21 

Variations  in  Risks  and  Cost — Industrial  Accident  Insurance 24 

Causes  of  and  Responsibility  for  Industrial  Accidents 24 

The  Agricultural  Accident  Insurance 25 

Causes  of  Agricultural  Accidents 26 

Responsibility   for   Agricultural   Accidents 27 

Expenditures,  etc. — Agricultural  Accident  Insurance 27 

Cost  of  Accident  Compensation  Hidden  by  Confusing  Practices 28 

Lessons  from  Germany's  Experience: 

Mistaken     Provisions     in    Accident    Insurance     Law — Errors     in     In- 
terpretation and  Administration — Proposed  Reforms 31 

Divided  Responsibility  for  Accident  Cases 32 

Excessive  Litigation  Fostered 33 

The  Pension  Fetish 35 

Cures  Not  Desired 38 

Over-Insurance  Permitted 39 

Errors  in  Interpretation  and  Administration 40 

"Drink  Money  Pensions" 41 

Mistakes  of  Tribunals 42 

Harmful  Publicity  to  Physicians'  Reports 45 

Mistaken  Policy  of  Some  Employers 46 

Injudicious  Method  in  Police  Investigations 46 

Conclusion 47 

Bibliography  of  Principal  Authorities  Quoted 48 


GERMAN  SOCIAL  INSURANCE  LEGISLATION 

Its  Disheartening  and  Evil  Effects. 


Almost  thirty  years  have  now  elapsed  since  the  German  nation 
first  adopted  the  compulsory  insurance  laws  against  sickness  and 
against  accidents  occurring  to  workingmen  in  the  course  of  their 
employment.  This  initial  legislation  has  been  followed  by  other 
enactments  designed  to  afford  the  worker  protection  and  relief  against 
other  ills,  such  as  invalidity  and  old  age  disabilities.  To-day  the  Ger- 
man laborer  is  looked  out  for  at  every  turn,  and  everything  possible 
is  done  for  his  social  uplift  and  physical  well-being.  No  other  coun- 
try has  so  complete  or  so  carefully  thought  out  a  system  of  legisla- 
tion in  the  interest  of  its  laboring  class. 

Germany's  pioneer  example  in  this  new  field  of  lawmaking  has 
been  followed  in  a  greater  or  a  less  degree  by  practically  all  the 
civilized  peoples  of  Europe.  This  copying  would  doubtless  have 
taken  place  in  any  event,  but  the  spread  of  the  new  doctrine  of  com- 
pulsory legislation  in  the  workers'  behalf  has  been  hastened  and  its 
imitation  greatly  stimulated  by  the  action  of  the  leading  German  of- 
ficials. On  every  possible  occasion  and  at  each  available  opportunity, 
the  Government  authorities  have  carried  on  an  active  propaganda  to 
enlighten  the  rest  of  the  world  as  to  the  beneficial  effects  of  this  new 
code  of  laws.  Besides  preparing  and  distributing  very  elaborate  and 
detailed  official  statistics  and  general  literature  on  the  subject,  no 
exposition  of  any  importance  has  been  allowed  to  take  place  during 
the  last  twenty  years  without  an  exhibit  showing  the  important  re- 
sults claimed  for  the  German  method  of  conserving  the  health  and 
strength  of  the  laboring  population. 

Although  thus  far  not  productive  of  very  many  statutory  re- 
sults, European  legislation  was  inevitably  bound  to  exert  more  or 
less  influence  on  public  opinion  in  the  United  States.  Social  workers 
have  long  deplored  the  lack  of  any  similar  enactments  in  our  com- 
monwealths, and  the  passing  of  workmen's  social  insurance  laws  along 
the  lines  of  European  models  has  for  many  years  been  more  or  less 
actively  urged.  Already  secured  in  some  instances,  their  adoption  is 
imminent  in  a  number  of  other  States.  The  desirability  of  this  form 
of  legislation  will  soon  be  a  subject  of  absorbing  popular  discussion 
in  America  and  any  information  tending  to  throw  light  on  its  actual 
effects  should  be  welcome. 

Heretofore  the  world  at  large,  generally  speaking,  has  heard  of 
only  the  agreeable  side  of  German  social  insurance.  Figures  galore 
have  been  published  recounting  the  millions  of  working  people  bene- 
fited, the  immense  sums  annually  spent  and  the  efforts  made  to  com- 


bat  disease  ^-ftd .i&  guajrd  :  against  the  occurrence  of  accidents.  Cer- 
tainly the*  fact's  recited  make  a  most  imposing  showing,  and  no  one 
will  deny  the  tremendous  amount  accomplished  in  uplifting  the  stand- 
ards and  in  increasing  the  comforts  of  life  for  the  great  mass  of  toil- 
ers. But,  as  every  object  has  its  reverse  side,  one  cannot  get  an  idea 
of  the  true  picture  presented  by  this  field  of  insurance  work  without 
taking  into  account  certain  drawbacks  and  insidious  effects  appearing 
in  a  constantly  more  disquieting  degree.  All  the  horizon  does  not 
indicate  fair  and  smooth  sailing,  for  some  dark  and  portentous  storm 
clouds  are  visible.  These  are  more  and  more  obscuring  the  out- 
look and  contain  elements  of  danger  which,  if  allowed  to  spread, 
will  largely  counterbalance  the  material  progress  heretofore  achieved. 

To  ascertain,  the  true  facts  in  regard  to  the  workings  of  German 
social  insurance  is  extremely  difficult  even  for  the  most  painstaking 
of  observers.  Very  little  data  exists  outside  of  the  official  reports 
and  the  more  or  less  inspired  government  publications.  There  is  no 
active  polemical  discussion  of  the  subject  to  be  found  in  Germany,  as 
in  France  or  England,  either  in  reports  of  chambers  of  commerce,  in 
periodicals  or  in  the  daily  press.  The  reason  for  this  is  not  hard  to 
find.  German  officialdom  from  the  Emperor  down  is  intensely  proud 
of  the  fact  that  the  idea  of  legislating  for  the  laborer's  social  better- 
ment originated  with  them  and  that  they  have,  in  this  respect,  set  an 
example  to  all  other  nations.  The  present  elaborate  framework  of 
social  legislation,  built  up  with  so  much  patient  care,  is  regarded  as 
something  distinctively  national  and  German,  and  its  carrying  out 
as  important  a  part  of  the  government's  work  as  the  upbuilding  of 
the  army.  To  criticise  either  branch  is  therefore  considered  bad 
form  and  unpatriotic,  besides  bringing  one  into  conflict  with  the 
all  powerful  official  class.  This  accounts  for  the  fact  that  so  little 
has  been  spoken  or  written  in  elucidation  or  derogation  of  the  pro- 
visions of  the  various  workmen's  insurance  laws.  The  inner  work- 
ings of  the  sickness  insurance  societies  have  yet  to  be  revealed.  What 
scanty  literature  has  thus  far  appeared — mainly  articles  in  medical 
publications — relates  more  to  the  effects  of  the  accident  insurance 
law.  Consequently  the  facts  hereinafter  stated  are  based  largely  on 
results  observed  more  particularly  in  that  field. 

On  the  political  side  the  new  social  policy  has  not  fulfilled  the 
expectations  of  its  early  sponsors.  The  belief  of  its  original  advo- 
cates was  that  a  cure  for  social  ills  could  be  found  in  the  positive 
advancement  of  the  welfare  of  the  working  classes.  By  going  further 
than  any  other  nation  in  the  granting  of  socialistic  demands,  the 
ground  was  to  be  cut  out  from  under  the  discontented  and  the  sup- 
port of  the  laboring  element  won.  Such  hopes,  however,  speedily 
proved  themselves  futile.  The  army  of  dissatisfied  has  constantly 
increased  in  number.  From  being  one  of  the  minor,  the  Social  Demo- 
cratic, with  its  four  millions  of  votes  and  in  members  of  the  Reich- 
stag, has  grown  to  be  the  most  important  of  all  the  German  political 
parties.  Strikes  and  lockouts  and  other  forms  of  conflict  between 
labor  and  capital  are  just  as  numerous  and  as  acute  as  formerly.  As 
a  means  of  reconciling  the  masses,  German  social  insurance  has,, 
therefore,  been  a  failure. 


Significant  of  the  growing  leering-'of;  d<mbt  al,,/to\tlW;nierits  of 
the  insurance  system  now  in  vogue  was  tlie  'adoption  'in  tne  Reichstag 
last  winter,  by  a  unanimous  vote,  of  a  resolution  calling  on  the  Chan- 
cellor of  the  Empire  for  a  prompt  report  "on  the  economic,  hygienic, 
moral  and  social  effect  of  the  German  workingmen's  protective  and 
workingmen's  insurance  legislation." 

Growth  of  Economic  Burden. 

The  astonishing  growth  of  the  economic  burden  is  made  clear 
by  the  following  figures : 

RELIEF    PAID    IN    THOUSAND    MARKS. 

Invalidity 


Year. 

1891 

1901.... 
1911.. 


Sickness 
Insurance. 

Accident 
Insurance. 

and  Old  Age 
Insurance. 

Total  Cost. 

98,620.5 
183,174.1 
397,056.9 

26,471.1 
99,301.1 
166,610.9 

15,299.5 
105,271.4 
203,866.3 

140,391.1 

387,746.6 
767,534.t 

Of  course,  a  large  part  of  the  increased  outlays  for  accident  and 
for  invalidity  and  old  age  insurance  is  entirely  normal,  due  to  a  nat- 
ural and  inevitable  gain  in  the  number  of  those  pensioned  through 
the  lapse  of  years.  As  a  whole,  the  number  of  those  covered  by  the 
various  branches  of  insurance  has,  roughly  speaking,  doubled  in 
twenty  years,  while  the  indemnities  paid  are  five  and  one-half  times 
as  great.  In  1911,  the  sickness  societies  spent  more  than  twice  as 
much  as  in  1901  for  the  relief  of  ailing  members  although  their  ad- 
herents were  only  one-third  more  numerous.  The  reserve  funds  ac- 
cumulated for  all  workingmen's  insurance  purposes  have  been  in- 
creased from  255  million  marks  in  1891  to  2660  million  in  1911,  or 
more  than  tenfold  in  twenty  years.  And  the  unliquidated  obliga- 
tions of  the  accident  insurance  have  increased  proportionately.  For 
the  employers'  industrial  accident  associations  alone  these  were,  at 
the  end  of  1911,  iioo  million  marks.  In  spite  of  these  rapid  and  con- 
stantly mounting  charges,  the  end  is  not  yet  in  sight.  Every  year 
new  projects  are  brought  forward  intended  to  widen  the  scope  of  th'is 
form  of  insurance,  to  provide  additional  benefits  for,  to  raise  the 
amount  of  and  to  facilitate  the  obtaining  of  compensation  by  the 
workingmen.  Unless,  therefore,  a  halt  is  called  in  time,  the  load  of 
this  social  legislation,  heretofore  successfully  carried,  may  become  a 
crushing  one  for  German  trade  and  industry. 


No  Cure  for  Poverty. 

Nor  does  the  struggle  for  existence  appear  less  strenuous  than 
before  for  the  great  mass  of  workers.  Considering  the  position  of 
women  alone,  the  number  of  women  industrial  workers  in  Prussia 
rose  from  2,697,462  in  1895,  to  4,492,235  in  1907  (the  last  year  for 
which  there  is  a  full  census),  or  67%  in  twelve  years.  The  number 


ing  from  ;§i]2}  148  >o  io5.i,55<>  'For  the  German  Empire  as  a  whole, 
women  engaged  in  industrial  pursuits  in  1907  were  close  to  one-sixth 
of  the  total  population,  while  in  France  they  numbered  less  than 
one-eighth.  Thus  if  one  may  judge  by  the  number  of  women  forced 
by  economic  necessity  to  earn  their  means  of  livelihood,  conditions 
are  really  worse  in  Germany — despite  its  costly  legislation  designed 
to  raise  the  status  of  the  laboring  class — than  in  the  adjacent  Gallic 
republic. 

Effects  on  General  Health  Questionable. 

Even  if  the  cost  of  German  social  insurance  be  heavy,  the  ex- 
penditure would  appear  entirely  justifiable  from  an  economic  stand- 
point provided  it  had  resulted  in  diminishing  sickness  and  in  improv- 
ing health  conditions  among  the  great  body  of  the  laboring  people. 
But  a  glance  at  the  following  table  shows  that  just  the  contrary  has 
been  the  case: 

Cases  of  Sickness  Average  No.  of  Days 

Year.  Per  100  Insured,  of  Sickness  Per  Case. 

1891 35.6  16.8 

1901 38.6  18.2 

1911 .'.... 43.3  19.7 

To  realize  how  disappointing  these  figures  are,  one  should  bear 
in  mind  that,  aside  from  the  fourfold  increase  in  sickness  benefit  pay- 
ments in  twenty  years,  546  millions  of  marks  have  been  spent  up  to 
the  end  of  1911  for  new  hospitals,  convalescent  homes  and  working- 
men's  recreation  resorts,  and  362  millions  more  for  hygienic  laborers' 
dwellings.  Yet,  in  spite  of  this  vast  expenditure,  the  German  work- 
man is  more  prone  than  ever  to  fall  a  victim  to  disease  and,  when  ill, 
requires  a  longer  time  than  formerly  to  recuperate.  Notwithstanding 
improved  and  better  hygienic  conditions,  the  German  working  popu- 
lation succumbs  more  readily  to  bodily  ailments  than  before  the  in- 
auguration of  the  new  system  of  insurance.  In  France,  on  the  other 
hand,  where  practically  nothing  has  been  spent  to  improve  housing- 
conditions  or  on  other  prophylactic  measures  and  where  sickness  in- 
surance is  voluntary,  workers  lose  annually  fewer  days  through  ill- 
ness than  ten  years  ago.  The  conclusion  is  irresistible  that  German 
workingmen's  insurance  contains  elements  which  endanger  the  health 
of  the  work-people,  and  to  a  great  extent  undo  the  good  accom- 
plished by  bettering  their  surroundings  and  habitations. 

Proceeding  to  an  examination  of  these  hidden  dangers,  a  loss  in 
the  powers  of  resistance  to  adverse  physical  conditions  is  first  of 
all  to  be  noted.  Knowledge  that  he  will  be  taken  care  of  causes  the 
workman  to  succumb  much  more  readily  to  trifling  ailments.  In- 
juries of  small  importance,  formerly  unnoticed,  are  now  deemed  suf- 
ficient to  warrant  abstension  from  labor.  A  small  finger  cut  leads 
to  six  weeks'  idleness.  Inconsequential  diseases  render  the  victim 
incapable  of  physical  exertion.  A  hardly  perceptible  attack  of  ca- 
tarrh results  in  50  days  and  a  mild  case  of  shingles  in  two  months' 
stoppage  of  work.  An  uninsured  person  or  a  professional  man  in 

8 


like  circumstances  finds  no  difficulty  in  continuing  his  customary  em- 
ployment. Constant  reflection  on  their  bodily  state  causes  the  in- 
sured to  take  notice  of  and  to  claim  sickness  benefits  for  minor  trou- 
bles like  passing  stomach  and  intestinal  disorders,  previously  deemed 
unworthy  of  notice. 

Promotes  Workmen's  Carelessness. 

Side  by  side  with  this  diminuation  in  the  stamina  of  the  work- 
people is  to  be  noted  a  greater  degree  of  carelessness  and  of  indif- 
ference to  the  consequences  of  accident.  The  feeling  that  a  high  pe- 
cuniary compensation  is  always  to  be  had  makes  the  dangers  of  his 
occupation  appear  less  important  to  the  factory  hand  and  accounts 
for  his  frequently  neglecting  the  commonest  precautions.  The  per- 
centage of  industrial  accidents  due  to  the  faults  of  the  workmen  has 
risen  from  26.56%  in  1887  to  41.26%  in  1907.  In  spite  of  all  safety 
and  accident  preventing  devices,  the  number  of  accidents — both  actu- 
ally and  relatively — is  steadily  rising.  It  is,  of  course,  possible  that 
the  rise  in  the  reported  accident  rate  may  be  due  to  more  widespread 
and  successful  malingering  on  the  part  of  the  workmen;  but  that 
would  place  the  German  insurance  system  in  an  equally  unfavorable 
light.  The  following  table  shows  how  accidents  have  been  running: 

Year.  Accidents  Reported.  Per  1,000  Workmen. 

1890 149,188  30.28 

1895 205,019  37.90 

1900 310,105  44.76 

1905 414,445  50.57 

1911 520,229  52.83 

It  is  clear,  therefore,  that  under  the  present  insurance  regime 
the  German  industrial  worker  is  not  being  trained  to  take  greater 
precautions  against  injury  to  himself  by  accidents. 

Retards  Recovery  from  Sickness  or  Injury. 

Another  pernicious  result  solely  ascribable  to  the  German  scheme 
of  workmen's  insurance  is  a  diminution  of  the  chances  of  recovery 
in  the  case  of  the  sick  and  the  injured,  accompanied  by  a  prolonga- 
tion in  the  duration  of  treatment.  As  is  well  known,  a  great  deal 
depends  in  every  case  of  illness  or  accident  disability  on  the  atti- 
tude of  the  patient.  If  he  is  anxious  to  be  up  and  about  and  to  re- 
sume the  use  of  his  limbs,  he  will  assist  the  efforts  of  the  doctor  in 
every  way  and  make  a  speedy  cure.  Of  especial  usefulness  is  this 
disposition  in  cases  where  a  full  recovery  can  only  be  effected  through 
the  accommodation  or  training  of  another  set  of  muscles  or  part  of 
the  body  to  do  the  work  of  the  portion  lost  or  impaired.  But  such 
seconding  of  the  physician's  recommendations  is  very  rarely  found 
among  the  beneficiaries  of  workingmen's  insurance.  As  one  German 
surgeon  put  it: 

"In  the  case  of  individuals  who  have  no  expectation  of  a  pension,  the  best 
possible  result  is  attained  in  the  briefest  time  through  the  necessity  of  having 

9 


to  work,  through  the  satisfaction  derived  from  the  progressive  healing  and 
through  constant,  voluntary  exercising.  *  *  *  When  it  comes  to  those  en- 
titled to  compensation,  the  results  as  regards  the  ability  to  earn  a  living  are 
entirely  different.  *  *  *  The  so  valuable  reinforcement  of  the  method  of 
treatment  which  we  note  with  non-insured  patients,  diminishes  very  consider- 
ably in  these  cases  [of  insured],  up  to  entire  passivity,  especially  with  older 
patients."* 

More  recently,  another  physician  has  made  this  statement: 

"Nevertheless,  I  must  say  that,  as  regards  the  time  and  prospects  of  re- 
covery, there  is  an  enormous  difference  between  insured  and  non-insured. 

*  *     *     The  difference  is  too  great  and  too  constant  to  allow  of  any  other 
explanation,  except  that  the  covetous  ideas  of  the  insured  are  responsible  for 
the  prospects  of  recovery  becoming  worse.    With  a  few  notable  exceptions,  the 
one  insured  does  not  want  to  be  restored  to  health,  but  wishes  to  obtain  a 
pension.    From  this  it  happens  that  such  an  infinitesimal  number  of  those  in- 
jured admit  themselves  that  they  are  entirely  cured.     If  Dr.  Stahl,  on  this 
point,  mentions  about  20  cases  as  having  come  under  his  observation  in  the 
course  of  his  professional  activities,  this  number,  according  to  my  experience, 
is  still  too  high.    In  the  case  of  paying  patients,  who  are  interested  in  getting 
out  of  the  hospital  quickly  and  in  resuming  work,  wounds  heal  generally  very 
quickly.    On  the  other  hand,  we  observe  that,  with  identical  injuries  to  insured 
patients,  we  often  do  not  make  any  progress.    With  the  latter,  the  treatment 
lasts  three  or  four  times  as  long  as  in  the  case  of  the  former  and  often  one 
does  not  attain  one's  object  at  all."f 

A  high  official  gives  this  as  his  opinion : 

"It  is  beyond  all  question  of  doubt  that  the  injured  frequently  fail  in  the 
absolutely  necessary  co-operation  in  the  restorative  treatment  for  fear  that  the 
amount  of  their  future  pensions  may  be  influenced  thereby.  The  result  is, 

*  *     *     that  despite  improvements  in  methods  of  healing  and  despite  advances 
in   surgery  for  workingmen,  the   prospects   of  recovery  have  not  risen,   but   have 
even  become  worse  than  formerly  "$ 

Another  respect  in  which  the  surgeons  complain  of  the  insured 
as  being  so  much  more  unsatisfactory  than  pay  patients  is  in  the 
refusal  to  undergo  slight,  painless  operations  by  which  restoration 
to  former  normal  working  capacity  can  be  assured.  Instead  of  wel- 
coming the  chance  of  being  forever  freed  from  a  stiff  joint  or  some 
other  functional  disability,  the  workmen  only  too  frequently  obsti- 
nately decline  to  allow  anything  of  the  sort  to  be  done. 

In  the  words  of  the  same  official: 

"In  the  same  category  belong  also  the  unfortunately  not  infrequent  cases, 
where  the  insured,  in  order  to  continue  in  the  enjoyment  of  a  pension,  declines 
to  allow  quite  unimportant,  painless  operative  measures  being  resorted  to, 
which  no  private  patient  would  refuse,  in  order  to  regain  his  full  bodily 
powers."!} 

Previous  to  the  introduction  of  workingmen's  insurance,  the  Ger- 
man standard  medical  textbooks  named  40  days  as  the  maximum 
period  required  for  the  healing  of  a  broken  arm  or  leg.  It  was  soon 
noticed,  however,  that  this  prognosis  was  altogether  too  favorable 
where  workmen  were  insured.  To  obtain  a  proper  use  of  a  frac- 

*H.  Llnlger;  "Archiv  fur  Orthopadle,  Mechanotherapie  und  Unfallchlrurgie,"  1907 
p.  123.  fBecker;  Westphalian  Alliance  Report,  p.  22;  (for  exact  title,  etc.,  of  this  re- 
port and  of  principal  citations  hereinafter,  see  Bibllograph,  last  page).  tStocker;  ib. 
p.  3.  fib. 

IO 


tured  arm  required  on  the  average,  where  insured  workmen  were 
concerned,  four  months'  time,  and  eight  months  for  a  fracture  of  the 
thigh  to  heal.  The  same  protraction  in  the  length  of  treatment  has 
been  noticed  elsewhere.  Austrian  workingmen's  accident  statistics 
indicate  12  weeks  as  the  necessary  period  of  healing  for  a  broken  fore- 
arm, 15  for  a  broken  arm,  19  for  a  broken  leg  and  22  weeks  for  a 
broken  thigh. 

In  Holland,  before  the  introduction  of  insurance  laws,  disloca- 
tions and  fractures  healed  much  more  quickly  than  in  Germany. 
The  Dutch  physicians  could  not  get  over  their  astonishment  at  the 
length  of  time  needed  across  the  border  before  an  insured  workman 
with,  say,  a  dislocated  shoulder  could  be  pronounced  cured.  When 
an  accident  insurance  law  based  on  the  German  model  went  into 
effect,  however,  the  time  needed  for  a  cure  in  Holland  became  longer 
and  longer  in  the  case  of  those  insured.  In  spite  of  the  perfecting 
of  surgical  methods,  therefore,  a  much  greater  period  of  disability 
has  to  be  assumed  now  where  an  insured  workman  is  involved.  Of 
those  injured  in  the  Austrian  railway  service,  0.26%  became  totally 
disabled  and  1.58%  semi-invalid  in  the  ten  years  before  the  passage 
of  the  compulsory  insurance  act;  whereas  in  the  first  ten  years  fol- 
lowing, 6.6%  became  totally  disabled  and  2.4%  semi-invalid.  Fur- 
ther illustrations  of  the  effect  of  workingmen's  insurance  in  delay- 
ing convalescence  and  lessening  the  prospects  of  recovery,  are  hardly 
needed. 

Unwillingness  to  resume  and  delay  in  the  resumption  of  work 
is  also  to  be  noted,  as  set  forth  below : 

"The  accident  patient  desires  a  high  compensation  and  frequently  his 
anxiety  is  great  lest  he  should  demand  too  little.  He  develops  a  quarrelsome 
disposition  and,  although  he  often  knows  better,  makes  much  out  of  trifling 
matters.  The  question  of  money  rules,  tyrannizes  over  and  demoralizes  him. 
In  order  not  to  let  his  working  powers  appear  too  great,  it  is  actually  patho- 
gnomonic  that  people  with  even  herculean  bodily  strength  do  not  wish  to  per- 
form the  slightest  bit  of  work.  Rather  than  find  the  most  inconsequential  oc- 
cupation before  the  determination  of  their  claims,  they  prefer  to  do  nothing  for 
month  after  month."* 

Breeds  Nervous  Diseases. 

One  of  the  most  serious  indictments  brought  against  German 
social  insurance  is  that  it  causes  a  new  functional  nervous  disease" 
called  traumatic  neurosis.  To  cite  some  medical  and  economic 
writers : 

"Through  the  state  taking  care  of  accidents  and  sickness,  many  people 
acquire  a  disease  of  the  nerves."f 

"One  can  say  with  certainty  that  before  the  coming  into  existence  of  acci- 
dent insurance  legislation,  traumatic  neurosis  did  not  in  reality  exist. "J 

"Workingmen's  insurance  is  of  itself  the  'agent  provocateur'  of  nervous 
diseases."§ 

"The  severe  nervous  conditions  following  accidents     *     *     *     occur,  with- 

*Naegell;  "Ueber  den  EInfluss  von  Rechtsanspruchen  bei  Neurosen,"  (cf.  "Biblio- 
graphy," last  page),  p.  11.  fib.,  p.  4.  Jib.,  p.  7.  §Bernhard;  "Unerwiinschte  Folgen 
der  deutschen  Sozialpolltlk,"  (cf.  Bibliography,  last  page),  p.  59. 

II 


out  regard  to  rank  in  life,  almost  exclusively  in  the  case  of  persons  who  have 
a  right  to  compensation.  Persons  who  have  no  such  right,  practically  never 
have  an  accident  neurosis.  Thus,  for  example,  one  is  hardly  ever  to  be  observed 
after  students'  duels  in  which  severe  wounds  to  the  head  are  of  daily  occur- 
rence. Among  the  many  thousand  patients  whom  I  have  treated  I  have  not 
yet  come  across  a  single  case  of  severe  neurosis  after  a  non-indemnifiable  ac- 
cident. *  *  *  From  this  the  inference — almost  universally  recognized  to- 
day in  expert  circles — is  to  be  drawn  that  the  so-called  accident  or  traumatic 
neuroses  are  almost  exclusively  neuroses  with  a  right  to  compensation."* 

"It  appears  more  and  more  clearly  that  an  accident  or  injury  is  not  needed 
for  the  arising  of  similar  and  in  principle  identical  pictured  illnesses.  With 
frightful  frequency,  the  same  complaints  appear  of  nervous  relaxation  and  in- 
ability to  work,  even  in  the  case  of  diseases  which  it  is  child's  play  for  the 
non-  or  not  fully  insured  to  overcome."! 

"Not  only  does  this  disease  occur  as  a  result  of  accident  insurance,  but  also 
exactly  similar  conditions  are  to  be  found  in  the  case  of  persons,  who  by  rea- 
son of  the  invalidity  pension  law,  seek  or  have  received  a  pension. "J 

"The  origin  of  this  sickness  is  generally  of  a  gradual  kind.  At  first,  noth- 
ing is  to  be  noticed  of  a  true,  nervous  shock.  Even  the  severely  injured  are 
able  in  the  beginning  to  make  extraordinarily  rapid  progress  toward  recovery. 
But  then  the  complaints  obtain  the  upper  hand  more  and  more.  The  disposi- 
tion of  the  sick  person  completely  changes.  He  becomes  surly,  morose — he  sees 
in  the  physician  his  enemy,  who  would  send  him  much  too  soon  to  work."§ 

"The  now  well  known  course  is  that  after  accidents,  which  can  be  as  small 
and  unimportant  as  one  likes,  nervous  troubles  of  the  most  varied  kind  appear, 
joined  with  a  hypochondriac  ill-temper,  which  makes  the  one  afflicted  in- 
capable of  work,  and,  at  the  same  time  secures  for  him,  under  the  law,  the 
right  of  drawing  a  pension  measured  accordingly  to  his  condition.  Simulation 
and  intentional  deception  regarding  non-existent  ills  are  not  in  question,  as  was 
originally  supposed.  The  individuals  are  really  ill,  but,  strange  to  say,  they 
zvould  be  well  if  the  law  zvere  not  in  existence.**  The  inner  connection  here  is 
this:  The  fact  of  being  insured  and  having  the  right  to  draw  a  pension  and 
even  more  (what  helps  to  reinforce  the  suggestive  effect)  the  talk  of  wives 
and  comrades  directs  the  attention  in  hypochondriac  fashion  to  the  state  of  the 
body,  so  that  the  educational  factor  of  necessity  is  done  away  with  as  well  as 
the — for  nervous  individuals — curative  and  needed  obligation  of  pulling  them- 
selves together  and  of  overcoming  small  ailments  by  ignoring  them."|§ 

"In  the  opinion  of  almost  all  writers,  the  women  are  the  strongest  impel- 
ling force;  friends  and  relatives  engage  in  a  sort  of  officious  competition  to 
depict  to  the  injured  man  in  as  severe  a  light  as  possible  the  results  of  the 
accident.  Consequently  he  watches  himself  day  and  night,  every  ache,  every 
weakness  and  every  attack  of  dizziness  is  noted,  highly-colored  and  magnified. 
The  insured  devote  their  whole  attention  to  the  state  of  their  bodies  and  to  the 
symptoms  of  their  illnesses."] | 

"In  cases  of  true  neurosis,  the  one  concerned  is  always  in  some  respect 
physically  below  par.  If  one  so  affected  meets  with  any  sort  of  an  accident, 
extreme  caution  is  necessary.  Generally  every  treatment  is  made  hopeless  by 
the  injured  man's  family  and  his  surroundings.  *  *  *  We  doctors  know, 
indeed,  that  it  is  always  a  critical  period  when  one  says  to  a  patient:  'Now 
you  are  entirely  well,  now  you  can  go  to  work  again.'  In  the  case  of  many, 
this  calls  for  a  certain  self-command  even  if  every  personal  advantage  in  re- 
maining ill  is  wanting.  It  is  only  too  agreeable  for  many  to  continue  in  the 

*Weber;  Westphalian  Alliance  Report,  p.  20.  fNaegeli,  p.  5.  $Sachs;  "Die  Unfall- 
neurose,"  (1909),  p.  42.  §Naegell;  p.  9.  i§Hoche;  "Geistetkrankhelt  und  Kultur,"  p.  2i. 
•fHellpach;  "Rentenhysterle." 

**ltal!cs  in  all  quotations  herein  are  the  compiler's. 

12 


enjoyment  of  rest  for  a  time  and  to  allow  themselves  to  be  spoiled.  We  are 
even  able  to  make  the  same  observation  in  the  case  of  animals.  If  a  dog  is 
stepped  upon  or  run  over,  we  see  him  continuing  to  limp  for  a  long  time  without 
there  being  anything  the  matter  with  him.  Should  he  suddenly,  however,  meet 
with  another  dog  or  a  cat  and  his  attention  be  attracted,  he  is  off  like  the  wind, 
and  in  the  twinkling  of  an  eye,  thinks  no  longer  about  limping.  The  best  means 
which  exist  to  prevent  traumatic  neurosis  from  arising  is  timely  resumption  of 
work."* 

"If  compensation  for  organic  functional  disturbances  were  excluded  from 
the  law,  traumatic  neurosis  would  be  reduced  to  an  infinitesimal  minimum. 
This  proposition  sounds  harsh,  but  it  is  just  the  contrary,  for  this  provision 
would  remove  from  the  world,  and  thereby  do  away  with  a  most  undesirable 
effect  of  social  legislation,  a  disease  which  is  created  by  the  law  and  its  method 
of  enforcement  and  which  injures  the  afflicted  most  of  all."f 

So  run  the  reports  regarding  this  especially  unpleasing  out- 
growth of  workmen's  compensation  laws.  Further  elucidation  or 
explanation  would  seem  unnecessary.  All  authorities  agree  in  say- 
ing that  the  statistics  heretofore  published  showing  only  a  limited 
number  afflicted  are  of  almost  no  value  owing  to  faulty  classification. 
The  disease  is  far  more  prevalent  than  supposed  and  is  constantly 
spreading. 

We  may  conclude  this  phase  of  the  subject  with  the  following: 

"Especially  noteworthy  also  is  the  number  of  nervous  disease  cases  among 
the  insured  engaged  in  agriculture.  How  often  are  no  diseased  conditions  at 
the  bottom  of  these  nervous  disease  cases,  but  rather  simulation  or  conscious 
exaggeration  of  unimportant  troubles!  How  especially  repugnant  is  the  fre- 
quent occurrence  in  agricultural  pursuits  of  nervous  illnesses  in  conjunction 
with  accidents,  where  otherwise  the  sojourn  in  the  fresh  air  and  the  employ- 
ment in  agricultural  pursuits  would  have  been  deemed  the  best  curative  mea- 
sure of  all  for  just  such  diseases!"! 

Bad  Moral  Effects. 

Passing  now  to  a  consideration  of  the  moral  and  ethical  effect  of 
the  German  social  insurance  legislation,  a  number  of  unpleasant  con- 
sequences are  discernible.  As  a  prominent  official  recently  said : 

"The  unfavorable  influence  of  this  insurance  in  the  field  of  ethics  is  at 
hand  to  a  disquieting  degree  and  cannot  be  overlooked  by  anyone  interested 
in  the  success  of  workingmen's  insurance."§ 

"Directly  untrue  statements  are  unfortunately  very  common.  I  wish  to  re- 
call a  regularly  recurring  incident.  Many  of  the  employers'  associations  ascer- 
tain from  the  employer  what  the  injured  workman  is  earning  before  the 
physician's  after-examination  takes  place.  If  one  compares  the  information 
derived  from  an  inspection  of  the  regular  wage  list  with  the  statement  made 
by  the  injured  workman  when  questioned,  it  almost  always  proves  true  that  the 
workman  makes  false  statements  regarding  his  pay.  There  are  not  two  work- 
men in  a  hundred  who  state  the  amount  of  their  wages  correctly."f§ 

On  the  subject  of  exaggeration,  another  one  remarks : 

"All  those  engaged  in  administering  this  insurance  are  so  generally  and 
universally  convinced  of  its  being  an  extraordinarily  wide  spread  phenomenon 
that  there  is  scarcely  a  doubt  as  to  the  actual  correctness  of  this  impression. 

*Becker;  Westphalian  Alliance  Report,  p.  22.    fWeber;  Ib.,  p.  20.    $Stahl;  !b.  p.  13. 
§lb.,  p,  14.    flLohmar,  !b.,  p.  28. 

13 


The  material  loss  of  the  employers'  associations  through  this  attitude  of  the 
insured  will  hardly  be  very  large.  *  *  *  The  loss  is  to  be  found  muck 
more  in  the  domain  of  morals  and  psychology,  in  the  weakening  of  the  sense 
of  truth  and  honesty.  Certainly  this  phenomenon  is  not  pleasing  and  is  not  to 
be  excused."* 

A  physician  states: 

"According  to  my  experience  also,  exaggeration  in  the  case  of  victim* 
of  accidents  is  extraordinarily  widespread;  in  fact,  it  is  to  be  termed  as  the 
usual  attitude.  It  is  greatly  to  be  regretted  that  social  insurance  should  have 
led  in  this  respect  to  a  destruction  of  ethical  standards,  but  one  must  put  up 
with  the  fact."f 

Exaggeration  is  not  confined  to  the  first  treatment,  but  is  found 
at  all  stages  of  a  case.  Referring  to  the  periodic  examinations  of 
the  injured,  a  law  officer  of  the  crown  remarks : 

"Here  also  simulation  and  exaggeration  play  a  deplorable  role.  *  *  * 
Among  the  great  number  of  those  entitled  to  pensions,  in  whose  cases  the 
consequences  of  accidents  are  either  done  away  with  or  in  a  great  measure  re- 
lieved, there  are  very  few  who  do  not  exaggerate  the  results  of  the  accidents  in 
order  to  continue  to  enjoy  the  pensions  originally  granted  to  them."J 

Another  one  says: 

"I  have  always  been  a  warm  friend  and  advocate  of  our  system  of  working- 
men's  insurance.  I  think  I  may  say  therefore  all  the  more,  that  the  improper 
exploitation  of  this  insurance  is  extraordinarily  widespread  and  has  become  a 
grave  danger.  I  recall  a  great  number  of  cases  *  *  in  which  the  re- 

sults of  accidents  were  exaggerated  in  a  quite  unlawful  way.  Especially  does 
this  appear  at  every  attempt  to  change  already  existing  pensions;  an  injured 
man,  who  in  such  cases  concedes  of  himself  an  improvement,  can  be  termed  a 
'white  raven.'  "§ 

Exaggeration  is  prevalent  everywhere,  but  conditions  are  worst 
of  all  among  agricultural  laborers.  How  widespread  this  evil  is  can 
be  judged  from  the  following:  In  1906  the  Westphalian  Agricul- 
tural Association  caused  1307  of  its  pensioners  to  undergo  a  strict 
examination  with  the  outcome  that  272  pensions  were  reduced  and 
388  were  stopped  altogether — 81  of  which  were  pensions  for  life — 
on  account  of  the  recipients  having  been  completely  cured.  In  the 
case  of  the  Posen  Association,  877  pensioners  were  examined  in  1900 
and  146  life  pensions  done  away  with.  In  Hessen-Nassau,  which 
shows  the  highest  accident  rate  of  all  the  Prussian  agricultural  asso- 
ciations, an  examination  of  10,548  pensioners  in  1907  resulted  in  17 
pensions  being  increased,  2,092  reduced  and  2,044  stopped  altogether. 
In  all  these  cases  one-sixth  to  one-quarter  of  all  pensions  were  being 
improperly  paid  to  persons  who  had  ceased  to  be  under  any  dis- 
ability whatever.  Such  figures  as  these  would  certainly  indicate  that 
the  German  workmen  have  become  past  masters  in  the  art  of  success- 
fully exaggerating  the  consequences  of  accidents  and  of  fooling  the 
doctors. 

Even  more  serious  perhaps  than  exaggeration  is  the  matter  of 
simulation  in  accident  cases.  Regarding  the  extent  of  this  evil  reli- 

*St6cker;  Westphalian  Alliance  Report,  p.  9.  fWollenweber;  lb.F  p.  23.  tStahl;  Ib., 
p.  14.  §Wandel;  Ib.,  p.  19. 


able  statistics  are  thus  far  wanting  and  are  difficult  to  obtain.     As 
one  authority  says : 

"Statistics  which  would  give  us  the  frequency  of  cases  of  simulation, 
prove  very  little;  at  the  most,  that  cases  of  crass  simulation  are  comparatively 
rare.  The  doctors  balk  at  using  the  term  simulation  and  choose  instead  a 
milder  expression,  probably  for  the  most  part  out  of  a  vague  fear  of  possible 
criminal  or  civil  proceedings."* 

A  high  medical  authority  makes  this  sweeping  assertion : 

"Based  on  a  very  wide  experience,  I  agree  entirely  with  Schultze  that  the 
number  of  imposters  and  those  who  intentionally  exaggerate  constitute  at 
least  50  per  cent  of  all  cases."^ 

As  to  forms  of  simulation,  the  following  is  in  point : 

"It  is  undeniable  that  cases  of  fraud  and  simulation  occur  and  are  made 
use  of  to  obtain  or  retain  the  advantages  granted  by  the  insurance  laws.  And 
we  who  are  in  active  practice  have  the  feeling  as  though  these  cases  are  by  no 
means  infrequent  and  show  a  tendency  to  increase,  especially  in  recent  years. 
In  our  opinion,  cases  of  simulation  involving  hoodwinking  of  the  doctor  do  not 
occupy  the  first  place,  but  rather  the  cases  in  which  occupational  accidents  are 
invented  in  order  to  cover  injuries  incurred  in  reality  outside  of  working  hours. 
Also  the  cases  in  which  it  is  wrongly  sought  to  make  either  an  accident  which 
has  not  taken  place  during  the  time  of  employment,  or  an  actually  incurred  ac- 
cident with  inconsequential  injuries,  responsible  for  organic  diseases.  In  this 
endeavor,  the  pension  seekers  are  often  mistakenly  aided  by  their  fellow  work- 
men. These  last,  as  we  have  been  able  to  prove  in  innumerable  instances,  af- 
firm without  the  slightest  compunction  the  absolute  untruths  of  the  injured 
when  the  official  inquiry  about  an  accident  occurs,  and  only  admit  at  the  time 
of  the  judicial  hearing,  when  they  are  put  upon  oath,  that  they  know  absolutely 
nothing  about  the  accident.  Not  only  do  the  employers'  associations  as  the 
immediate  sufferers,  but  likewise  the  administrative  officials  and  the  police 
authorities,  who  conduct  the  official  inquiries  into  accidents,  have  the  impres- 
sion that  these  designated  cases  are  not  at  all  uncommon  and  are  on  the  in- 
crease.":!: 

A  prominent  physician  records  himself  thus : 

"In  my  opinion  the  increasing  number  of  feigned  accidents  deserves  very 
serious  attention.  It  is  inherent  in  human  nature  to  search  for  outside  causes 
for  every  possible  illness,  nevertheless  we  find  this  tendency  enormously  en- 
hanced in  the  case  of  our  obligatorily  insured.  If  we  hear  absolutely  nothing 
about  an  accident  at  the  time  of  the  admittance  to  the  hospital,  the  accident 
becomes  for  the  sick  person  within  a  few  weeks  a  quite  notorious  event,  easily 
and  clearly  provable.  There  is  scarcely  a  case  of  consumption  where  an  acci- 
dent is  not  soon  given  as  the  cause.  If  it  is  not  a  kick,  a  sprain  or  a  disloca- 
tion, then  'lifting'  appears  in  many  cases.  Especially  by  the  last  is  every  pos- 
sible ailment  sought  to  be  explained."! 

How  ideas  of  simulation  are  spread  is  described  by  another  medi- 
cal informant : 

"If  a  person  with  diseased  lungs,  while  at  work  or  a  few  hours  after  work, 
is  stricken  with  a  hemorrhage,  so  common  in  a  disease  of  this  kind,  and  if 
this  is  recognized  as  an  'accident,'  then  such  a  sick  person  becomes  by  no  means 
infrequently  a  drain  upon  the  employers'  association  for  the  rest  of  his  life, 
although  it  is  a  case  of  disease  in  which  there  can  be  no  discussion  about  an 
accident  in  the  ordinary  sense  of  the  term.  A  few  instances  like  this  naturally 

*Wollenweber;    Westphalian    Alliance    Report,    p.    23.      fNaegeli;    p.    12,      JStocker; 
Westphallan  Alliance  Report,  p.  8.     §Peters;  Ib.,  p.  21. 


become  quickly  known  and  are  in  an  extraordinary  degree  adapted  to  arouse 
in  persons  similarly  afflicted  the  desire  for  an  accident  pension,  a  circumstance 
which  has  a  very  bad  moral  effect.  According  to  my  experience,  this  un- 
desirable result  of  social  insurance  is  especially  widespread  in  the  country  dis- 
tricts, where  an  'accident'  in  the  above  sketched  sense  can  very  easily  be  fabri- 
cated with  the  help  of  members  of  the  family."* 

In  a  large  number  of  cases  it  is  extremely  difficult  for  the  physi- 
cian to  detect  simulation,  and  this  in  spite  of  the  fact  that  most  in- 
genious apparatus  and  methods  have  been  devised  to  detect  the  falsity 
of  a  patient's  statements.  A  case  in  point  is  that  of  a  laborer,  who 
complained  of  constant  dizziness  and  headache  after  an  injury  to 
his  head.  In  spite  of  long  observation,  his  fraud  was  not  discovered 
until  he  was  detected  one  day  scaling  some  lofty  peaks  with  a  party 
of  mountain  climbers,  when  the  slightest  feeling  of  dizziness  might 
have  resulted  in  a  mis-step  with  fatal  consequences.  Here  the  ex- 
amining physician  was  hardly  to  blame,  for  to  prove  the  simulation 
of  pain  is  the  hardest  task  of  all. 

Unfortunate  Change  in  Relations  Between  Doctors  and  Patients. 

Indeed,  one  of  the  saddest  things  to  note  since  the  adoption  of 
German  social  insurance  is  the  change  in  the  relations  existing  be- 
tween doctors  and  their  workingmen  patients.  Formerly  the  latter, 
like  the  private  patients  of  to-day,  would  freely  and  frankly  confide 
their  woes  to  the  family  practitioner.  If  he  restored  them  to  health, 
they  were  correspondingly  grateful.  Nowadays  everything  is  differ- 
ent. In  place  of  being  considered  as  a  friend  and  helper,  the  doctor 
is  regarded  as  an  inimicable  person  bent  upon  cutting  down  as  much 
as  possible  or  upon  doing  entirely  away  with  the  hitherto  granted 
pension.  He  is  no  longer  a  fraternal  healer,  but  the  one  who  would 
deprive  the  patient  of  a  source  of  income.  Hence  all  confidence  be- 
tween the  parties  is  destroyed,  and  mistrust  and  deception  arise  in- 
stead. In  making  his  diagnosis,  the  physician  must  now  first  of  aill 
consider  the  Avorkingman's  character.  As  one  medical  man  has  writ- 
ten: 

"In  my  opinion,  the  cardinal  point  in  the  making  of  a  report  is  to  post 
one's  self  regarding  the  reliability  of  the  patient.  *  *  *  In  all  these  ex- 
aminations, I  do  not  inquire  into  sharpness  of  hearing,  keeness  of  sight,  extent 
of  vision,  muscular  force,  or  degree  of  sensibility,  but  rather  first  of  all  into 
the  credibility  of  the  individual."! 

How  unpleasant  must  the  doctor's  profession  be  when  he  can 
never  rely  on  the  truth  of  a  patient's  statements  and  how  much  hate 
and  bitterness  must  fall  to  his  lot  when  he  recommends  less  than 
the  expected  amount  of  compensation !  To  treat  patients  under  such 
conditions  must  indeed  be  a  thankless  task. 

Destroys  Sense  of  Responsibility. 

Loss  of  individual  sense  of  responsibility  is  one  of  the  marked 
accompaniments  of  the  new  social  insurance.  As  others  have  pointed 

*Weber;  Westphalian  Alliance  Report,  p.  20.     fNaegeli;  p.  17. 

16 


out,  this  does  more  than  anything  else  to  help  the  spread  in  epidemic 
fashion  of  unsound  ideas. 

"The  conviction  that  every  accident  entitles  the  injured  party  as  a  matter 
of  right  to  the  highest  possible  compensation  has  come  to  be  a  dogma  among 
the  people  and  the  common  property  of  the  masses.  The  pursuit  of 

a  pension  is  regarded  as  eminently  lawful.  *  *  *  The  distortion  of  elemen- 
tary ideas  has  gone  so  far  that  the  drawing  of  a  pension  is  regarded  as  an 
honor."* 

Thus  the  ground  is  prepared  for  an  epidemic  outbreak  of  the 
pension  mania.  To  show  how  serious  this  has  become  in  Germany, 
we  cannot  do  better  than  to  quote  the  warning  of  the  rector  of  a  uni- 
versity in  regard  thereto: 

"Thirty  years  ago  it  was  still  an  unknown  term,  to-day  it  is  a  disease 
which,  as  a  cancer  in  the  organism  of  our  working  population,  is  rightly  a 
cause  of  grave  anxiety.  This  people's  plague  did  not  only  arise  after  the  en- 
actment of  accident  insurance  legislation,  but  is  directly  dependent  on  it.  There 
is  no  doubt  that  the  law  has  produced  the  disease.  No  one  was  able  to  foresee 
it.  One  is  reminded  of  Bismarck's  comparison  of  the  state  to  a  living  organism, 
with  which  one  should  experiment  carefully."f 

Another  person  remarks : 

"If  there  are  to-day  in  Germany  over  900,000  persons  in  receipt  of  pensions 
as  a  result  of  sickness  and  accident  insurance  alone,  this  fact  constitutes  a 
grave  danger  and  is  a  means  of  infection  not  only  for  the  apprehensive  and 
the  weak  in  character,  but  also  for  avaricious  and  for  mentally  defective  per- 
sons."! 

In  view  of  all  that  has  gone  before,  the  social  effect  of  working- 
men's  insurance  laws  hardly  needs  any  detailed  discussion.  The  fol- 
lowing quotation  will  probably  suffice  on  that  point: 

"By  reason  of  the  state  looking  after  accidents  and  sickness,  many  people 
either  fall  a  victim  to  nervous  diseases  or  their  healing  is  retarded  and  de- 
layed in  a  very  high  degree  by  the  disorders  closely  connected  with  their  being 
insured.  On  account  of  this  undeniably  existing  condition  of  affairs,  we  have  to 
speak  of  an  anti-social  influence  of  social  insurance"^ 

Conclusion — Germany  Awakening  to  Mistakes. 

Whichever  way  we  turn,  therefore,  and  from  whatever  stand- 
point we  regard  German  social  insurance,  drawbacks  and  serious 
objections  are  to  be  observed.  Far  from  being  a  great  blessing,  as  the 
interested  officials  would  have  us  believe,  it  is  breeding  a  host  of 
evils  which  greatly  diminish,  if  indeed  they  do  not  outweigh,  its  bene- 
fits. The  cost  is  tremendous,  for  one  must  include  not  only  the  ex- 
pense in  dollars  and  cents,  but  also  the  economic  loss  caused  by  the 
rise  in  the  sickness  rate,  the  prolongation  in  the  time  of  healing,  the 
diminution  of  the  chances  of  recovery  and  the  failure  to  work  to  full 
capacity.  If  sanitary  buildings  are  lavishly  erected  in  order  to  stamp 
out  disease,  other  costly  and  baneful  forms  of  illness  are  either  di- 
rectly engendered  or  mightily  stimulated.  The  efficacy  of  the  great 

*Bernhard;  p.  75.     fHoche;  "Geisteskrankhelt  und   Kultur,"  p.  25.     gNaegall;  p.  23. 
§lb.,  p.  14. 

17 


sums  spent  for  accident  prevention  is  largely  neutralized  through  a 
more  widespread  indifference  and  neglect  of  precautions.  Simula- 
tion and  fraud  are  much  more  prevalent  than  formerly,  combined  with 
a  decided  lowering  in  the  moral  standards  of  the  working  classes. 
Truly  a  far  from  pleasing  picture ! 

The  German  system  of  social  legislation  has  been  likened  to  a 
plan  to  change  the  modern  state  into  a  vast  insurance  community, 
where  everything  is  provided  for  or  guarded  against.  Of  the  effect 
of  such  a  policy,  we  may  quote  the  following  extract  from  an  article 
in  a  Swiss  newspaper : 

"The  feeling  that  one's  future  is  looked  out  for  is  in  itself  very  pleasing, 
but  with  many  it  kills  the  desire  for  independence  or  to  attain  a  higher  sta- 
tion in  life  through  one's  own  efforts.  If  the  necessity  of  self-help  no  longer 
comes  into  play — which  brings  to  their  full  development  the  energies  and  the 
abilities,  whether  physical  or  mental,  of  persons  in  full  vigor — and  every  in- 
dividual relinquishes  to  Mother  State  all  troubling  about  the  future,  then  the 
danger  arises  of  even  those  who  are  anxious  to  partake  of  the  fray  slackening 
their  efforts  in  the  field  of  open  competition.  For  the  community  as  a  whole 
it  appears  of  doubtful  advantage  if  also  the  third  estate  becomes  bureau- 
craticized  and  turned  into  a  great  horde  of  pensioners,  in  which  the  right  to  a 
pension  stifles  all  further  effort."* 

A  Berlin  master-artisan  laments  as  follows: 

"We  are  at  the  point  of  destroying  all  creative  effort  and  of  creating  a 
state  consisting  solely  of  a  mass  of  officials.  *  *  *  Through  all  these 
regulations  our  German  Nation — formerly  the  most  industrious  in  the  world — 
is  becoming  lazy  and  easy-going.  If  one  thinks  back  to  the  period  now  many 
years  ago,  there  was  then  universal  joy  in  workshop  and  factory  if  many  orders 
came  in,  and  everyone — whether  master,  apprentice  or  workman — vigorously 
took  hold  so  that  work  and  remuneration  might  correspond.  To-day,  however, 
when  a  mass  of  orders  appears  there  is  a  strike."f 

In  another  connection,  a  somewhat  detailed  explanation  will  be 
attempted  of  the  various  errors  and  faults  to  be  found  in  German 
social  legislation  as  typified  in  the  case  of  the  accident  insurance  law. 
It  will  suffice  here  to  call  attention  to  the  great  cardinal  mistake  of 
the  whole  German  system,  namely,  the  attaching  of  too  great  an  im- 
portance to  the  matter  of  pensions  instead  of  making  the  conserva- 
tion of  human  forces  supreme.  The  German  plan  has  worked  badly 
because  it  is  based  on  the  idea  of  protecting  and  coddling  the  work- 
man, with  everything  revolving  more  or  less  about  the  question  of  a 
money  indemnity.  The  only  method  in  which  workingmen's  com- 
pensation laws  can  be  made  to  redound  to  the  profit  of  all  concerned 
is  by  making  them  educational  and  restorative.  In  other  words,  they 
should  teach  and  train  the  laborer  above  all  other  things  to  take  care 
of  and  to  preserve  his  bodily  health  and  strength.  If  this  correct 
principle  be  deviated  from,  pernicious  results  are  certain  to  follow, 
and,  rather  than  being  the  blessing  intended,  these  laws,  conceived 
in  so  noble  and  humanitarian  a  spirit,  are  more  likely  to  prove  a  curse. 
The  truth  of  this  is  being  realized  in  Germany  itself,  as  the  following 
extracts  from  speeches  of  two  prominent  authorities  will  show: 

"In  the  case  of  social  insurance,  everything  is  made  to  depend  much  too 
*"Neue     ZOrlcher  Zeltung,"  Aug.  13,  1913.     fib. 

18 


uniformly  on  the  system  of  pensions.  The  insured  now  devote  all  their  efforts 
to  retaining  their  pensions  as  long  as  possible  and  they  arrange  to  make  cor- 
respondingly little  use  of  their  remaining  working  powers.  This  struggle  for  a 
pension  ruins  the  sound  and  calls  forth  true  pension  hysteria  among  those  hys- 
terically inclined."* 

"The  pension  mania  frequently  thwarts  every  rational  mode  of  treatment, 
and  especially  all  operative  treatment.  *  *  *  Of  course,  this  would  have 
been  entirely  different  if  at  the  start,  when  the  accident  insurance  law  was 
first  introduced,  such  an  over-estimate  of  the  pension  idea  had  not  prevailed 
and,  if  one  had  only  clearly  understood  at  the  beginning  instead  of  after  25 
years,  that  the  treatment,  the  restoration  of  the  former  working  strength  of 
the  injured  is  to  be  regarded  as  of  the  first  importance.  Only  when  this 
wholly  or  partially  fails  should  the  awarding  of  a  pension  take  its  place.  From 
my  point  of  view  *  *  *  the  great,  truly  new  idea  underlying  accident  in- 
surance is  not  to  be  found  in  the  noble  and  humanitarian  purpose  of  a  pension 
grant  for  lessened  ability  to  work.  It  is  rather  in  having  the  employers,  as  a 
result  of  general  public  laws,  obliged  to  give  their  money  for  the  immediate  and 
rational  treatment  of  the  injured  and  for  so  long  as  the  enhancing  or  the 
restoration  of  the  former  working  ability  through  the  physician's  art  appears 
possible.  The  law  should  serve  not  only  a  humanitarian  but  above  all  a  social 
purpose,  that  is,  the  preservation  of  the  people's  strength." 

"In  other  words:  If  the  laborer's  likelihood  of  obtaining  a  pension  was  as 
rare  as  it  is  to-day  frequent  he  would  then  have  an  entirely  different  interest 
in  his  recovery  and  would  have  much  more  cause  to  do  his  part  so  that  he 
could  resume  work  as  soon  as  possible."! 

Eight  years  ago,  a  far-sighted  imperial  minister  exclaimed  in 
the  Reichstag,  in  substance : 

"We  are  proud  of  our  social  legislation — it  has  merely  aroused  the  spirit 
of  lucre  among  our  workingmen.  Its  charges  are  high  and  its  success  is 
relatively  small,  with  the  spirit  of  discontent  everywhere  rife."$ 

Recently  the  same  idea  has  been  expressed  by  another  official, 
as  follows: 

"The  root  of  the  evil  is  to  be  found  after  all  in  nothing  else  but  the  power 
of  attraction  which  money  exerts  upon  the  human  mind,  in  the  curse  of  gold 
already  sung  in  olden  times.  *  *  *  We  have  to  reckon  with  this  quality 
of  human  nature,  which  is  something  we  cannot  change.  From  this  the  moral 
is  to  be  drawn,  however,  to  make  use  of  every  means  to  prevent  those  condi- 
tions arising  which  give  a  legal  right  to  a  money  compensation."§ 

No  greater  fallacy  exists  to-day  than  the  apparently  widespread 
notion  that  German  social  legislation  has  had  a  wonderful  success 
and  is  a  pattern  for  other  nations  to  follow.  Founded  on  a  mis- 
conception as  to  the  correct  underlying  principle,  and  pushing  the 
question  of  compensation  in  money  always  to  the  front,  the  German 
compensation  laws  are  working  very  badly  in  practice  and  are  full 
of  defects.  They  are  far  from  being  masterpieces  for  others  to  copy 
slavishly .fl  If  given  a  chance  to  start  over  again  with  a  clean  slate,  it 
is  safe  to  say  that  the  Teutonic  law-makers  would  make  radical 

*Ste!n;  Westphalian  Alliance  Report,  p.  60.  fRieder-Bonn;  ib.,  p.  16.  $Von  Posa- 
dowsky,  April  11,  1905.  §Stahl;  Westphalian  Alliance  Report,  p.  14. 

fFor  a  similar  diagnosis  of  the  German  social  insurance  laws,  see  "The  German 
Laws  of  Insurance,"  by  T.  E.  Young,  Past- President  of  the  Institute  of  Actuaries, 
Post  Magazine  and  Insurance  Monitor,  (London),  Oct.  11,  1913. 

19 


changes  in  their  whole  system  of  social  laws  as  at  present  constituted. 
As  it  is,  the  protests  against  the  workings  of  these  laws  and  the  de- 
mand for  their  thorough  revision  are  becoming  louder  and  louder. 
The  belief  is  growing  in  Germany  that,  as  between  the  honest,  indus- 
trious and  thrifty  among  the  working  people,  on  the  one  hand,  and 
the  dishonest,  lazy  and  shiftless  on  the  other  hand,  these  laws  are  of 
comparatively  small  benefit  to  the  former,  but  in  every  way  favor 
and  subsidize  the  latter — and  at  the  expense  of  the  former. 

If  the  Germans  themselves  are  waking  up  to  the  fact  that  their 
social  betterment  laws  are  radically  defective  and  defeating  their  own 
objects,  if  they  are  beginning  to  realize  that  they  have  been  proceed- 
ing on  the  wrong  tack  and  are  seriously  considering  the  advisability 
of  changing  their  course  on  many  points,  how  ill-advised  it  would  be 
for  any  other  State  or  country  to  take  over  the  German  laws  in  toto, 
as  has  been  so  often  proposed.  For  the  careful  student  and  the 
would-be  legislator  the  most  valuable  lessons  as  to  how  not  to  pro- 
ceed can  be  derived  from  the  history  of  German  social  insurance. 

Consequently  not  to  profit  by  the  mistakes  of  the  pioneer  nation 
in  the  field  of  social  legislation  and  to  disregard  the  warnings  of 
German  experience,  would  seem  the  height  of  folly.  Furthermore, 
it  is  of  the  utmost  importance  that  all  new  social  enactments  be  framed 
on  the  right  lines.  It  will  not  do  to  pass  a  crude  or  faulty  measure, 
for  once  the  correct  path  is  deviated  from,  it  becomes  extremely  dif- 
ficult, if  not  impossible,  to  return  to  the  right  track.  Party  politics 
and  the  clashing  of  class  interests  block  more  or  less  the  passage  of 
any  reform  measure.  This  is  what  the  Germans  are  now  finding  out. 

Finally,  it  should  be  said  that  the  faulty  provisions  in  the  Ger- 
man compensation  laws  have  been  much  aggravated  in  their  work- 
ings by  errors  in  administration  and  mistakes  in  interpretation.  What 
these  legislative  defects  are  and  how  the  laws  are  being  misinterpreted 
and  misconstrued  will  be  pointed  out  later. 


GERMAN  ACCIDENT  COMPENSATION  LAW 
Experience  and  Statistics. 

Compensation  for  accidents  to  workingmen  in  Germany  dates 
back  to  1885,  when  industrial  accidents  were  first  required  to  be  in- 
sured against.  Three  years  later  accidents  incurred  in  agricultural  pur- 
suits were  included  within  the  scope  of  the  law.  To-day  there  are 
about  twenty-five  millions  compulsorily  insured  against  occupational 
accidents,  or  three-eighths  of  the  whole  population.  Included  therein 
are  almost  one-half  of  all  the  men  and  more  than  one-quarter  of  all 
the  women.  No  other  country  has  so  extended  or  so  complete  a  sys- 
tem of  insurance  covering  accidents  incurred  by  its  laboring  classes. 
In  order  to  make  clear  the  matter  to  be  hereinafter  set  forth,  the 
salient  points  of  the  German  law  will  be  briefly  referred  to  and  the 
accident  statistics  explained. 

The  act  obliges  all  employers  affected  to  form  and  join  mutual 
associations,  over  which  the  government  authorities  exercise  a  watch- 
ful supervision  and  a  more  or  less  intimate  control.  There  are  now 
116  of  these  associations  in  all,  67  of  which  include  those  employed  in 
industrial  undertakings  and  49  those  engaged  in  agricultural  pursuits. 


The  Industrial  Accident  Insurance. 


Considering  first  the  scope  and  accident  record  of  the  industrial 


association,  the  following  table  is  of  interest : 


Year. 

1885 

1886 

1887. .  . 


1890... 
1891... 
1892... 
1893... 
1894. . . 
1895... 
1896... 
1897... 
1898... 
1899. . . 
1900.  .  . 


No.  Workmen 
Insured. 
2,986,248 
3,473,435 
3,473,435 
4,320,663 
4,742,548 
4,926,672 
5,093,412 
5,078,132 
5,168,973 
5,243,965 
5,409,218 
5,734,680 
6,042,618 
6,316,834 
6,658,571 
6,928,894 


No.  Full 

Time 
Workers. 


5,170,366 
5,462,829 
5,781,495 
6,021,856 


Accidents         Per1,OOC 
Reported.      Workmen. 


92,316 
105,897 
121,164 
139,549 
149,188 
162,674 
165,103 
182,120 
190,744 
205,019 
233,319 
252,382 
270,907 
298,918 
310,105 


27.42 
28.04 
29.42 
30.28 
31.94 
32.49 
35.23 
36.37 
37.90 


41.77 
42.89 
44.89 
44.76 


21 


Year. 

1901.. 
1902.. 
1903.. 
1904.. 
1905.. 
1906.. 
1907.. 
1908.. 
1909.. 
1910.. 
1911.. 


No.  Workmen 
Insured. 
6,884,076 
7,100,537 
7,466,484 
7,849,120 
8,195,732 
8,625,500 
9,018,367 
8,917,772 
9,003,908 
9,381,878 
9,846,599 


No.  Full 

Time 
Workers. 
6,000,615 
6,226,584 
6,553,514 
6,868,496 
7,159,842 
7,512,728 
7,869,421 
7,868,531 
7,945,797 
8,291,936 
8,653,302 


Accidents 

Per  1,001 

Reported. 

Workmen. 

319,576 

46.42 

325,566 

45.99 

356,202 

47.71 

392,658 

50.03 

414,445 

50.57 

449,903 

52.16 

465,224 

51.59 

461,091 

51.82 

465,760 

51.73 

484,097 

51.60 

520,229 

52.83 

Noteworthy  is  the  uniform  rise  in  the  number  of  reported  acci- 
dents, which  in  1911  reached  their  highest  point  both  actually  and 
relatively.  In  spite  of  all  preventive  measures,  therefore,  the  accident 
rate  is  higher  than  ever.  But  when  we  turn  to  the  results  under  the 
accident  insurance  an  entirely  different  set  of  figures  confronts  us. 
This  variance  is  due  to  the  fact  that,  under  the  German  law,  all  acci- 
dents entailing  a  disability  of  only  13  weeks  or  less  are  treated  almost 
exclusively  either  by  the  sickness  insurance  societies  to  which  the 
victims  belong,  or  by  the  local  authorities  in  case  there  is  no  sickness 
insurance.  If  an  injured  man  has  not  recovered  at  the  end  of  13 
weeks  (approximately  three  months),  the  proper  employers'  associa- 
tion then  steps  in  and  assumes  the  expense  of  taking  care  of  him. 
The  accident  associations,  therefore,  are  only  charged  with  and  only 
record  the  number  of  accidents  treated  in  excess  of  13  weeks,  which 
are,  of  course,  only  a  small  percentage  of  all  the  accidents  incurred 
in  any  given  year.  This  accounts  for  the  comparatively  small  total 
of  accidents  reported  in  the  next  table  under  the  head  of  "first  time 
accidents" — meaning  thereby  the  accidents  treated  for  the  first  time, 
in  the  year  in  question,  by  the  accident  associations.  German  accident 
statistics  are,  consequently,  very  confused  and  unsatisfactory,  for  they 
throw  no  light  on  the  outcome  of  by  far  the  greater  proportion  of 
accidents  which  are  treated  solely  by  the  Krankenkassen  or  sickness 
societies. 

For  the  employers'  industrial  accident  associations  alone,  the  fol- 
lowing figures  are  published : 


Year. 


1886 

1887 

1888 


1890 

1891 

1892 

1893 

1894 

1895 

1896 


First 

Time 

Acc'ts. 

226 

9,723 

15,970 

18,809 

22,340 

36,403 

28,289 

28,619 

31,171 

32,797 

33,728 

38,538 


Deaths. 

226 
2,442 
2,956 
2,943 
3,382 
3,597 
3,634 
3,282 
3,589 
3,438 
3,644 
4,040 


Perm. 
Total 
Disab. 

1,548 

2,827 

1,886 

2,331 

1,784 

1,570 

1,507 

1,377 

855* 

780 

595 


Perm.  Acc'ts  per  Per  1,000 

Part.          Temp.  1,000     Full  Time 

Disab.         Disab.       Insured.  Workers. 


3,780 
8,126 
10,270 
12,788 
16,194 
17,481 
18,049 
19,740 
20,025 
19,312 
20,251 


1,973 
2,061 
3,710 
3,839 
4,828 
5,604 
5,781 
6,465 
8,479 
9,902 
13,652 


2.80 
4.14 
4.35 
4.71 
5.36 
5.55 
5.64 
6.03 
6.25 
6.24 
6.72 


*See  note  to  next  table. 


22 


Year, 
1897.. 
1898.. 
1899.. 
1900.. 
1901.. 
1902. . 
1903.. 
1904. . 
1905.. 
1906.. 
1907.. 
1908.. 
1909.. 
1910.. 
1911.. 


First 

Perm. 

Perm. 

Acc'ts  per 

Per  1,000 

Time 

Total 

Part. 

Temp. 

1,000 

Full  Time 

Acc'ts. 

Deaths. 

Disab. 

Dlsab. 

Dlsab. 

insured. 

Workers. 

41,746 

4,252 

625 

21,247 

15,622 

6.91 

8.07 

44,881 

4,613 

538 

22,348 

17,382 

7.10 

8.22 

49,175 

4,772 

581 

23,837 

19,985 

7.39 

8.51 

51,697 

5,108 

592 

24,790 

21,207 

7.46 

8.58 

55,525 

4,979 

595 

26,158 

23,793 

8.07 

9.25 

57,244 

4,572 

605 

26,680 

25,387 

8.06 

9.19 

60,550 

4,720 

621 

27,427 

27,782 

8.11 

9.24 

65,205 

4,976 

603 

28,868 

30,758 

8.31 

9.49 

68,360 

5,154 

572 

23,423 

33,211 

8.34 

9.55 

71,227 

5,398 

578 

30,134 

35,117 

8.26 

9.48 

75,370 

6,078 

571 

30,280 

38,441 

8.36 

9.58 

74,581 

5,939 

566 

29,114 

38,962 

8.36 

9.48 

70,986 

5,612 

453 

25,726 

39,195 

7.88 

8.93 

69,311 

5,292 

453 

23,800 

39,766 

7.39 

8.36 

70,423 

5,832 

413 

22,878 

41,300 

7.15 

8.14 

An  examination  of  the  above  table  reveals  the  fact  that  the  num- 
ber of  "first  time  accidents"  reached  their  maximum  in  1907.  Serious 
accidents  are  somewhat  less  numerous,  therefore,  than  formerly.  As, 
however,  the  total  number  of  accidents  incurred  annually  is  steadily 
mounting,  it  appears  that  the  increase  is  entirely  in  minor  accidents 
or  those  entailing  less  than  13  weeks'  disability.  Furthermore,  be- 
sides being  smaller  in  number,  the  consequences  of  the  accidents 
handled  by  the  employers'  associations  average  less  severe  than  for- 
merly, as  the  following  table  will  show: 


r— 

Per  1,000 
Perm. 

Insured  - 
Perm. 

\ 

Jr  1,000  Fi 
Perm. 

ill  Worke 
Perm. 

rs  

Total 

Part. 

Temp. 

Total 

Part. 

Temp. 

Year. 

Deaths. 

Dlsab. 

Dlsab. 

Disab. 

Deaths. 

Disab. 

Disab. 

Disab. 

1886  

....      0.70 

0.44 

1.09 

0.57 

1887  

0.77 

0.73 

2.11 

0.53 

1888  

....      0.68 

0.43 

2.38 

0.86 

1889  

0.71 

0.49 

2.70 

0.81 

1890  

....       0.73 

0.38 

3.27 

0.98 

1891  

....       0.71 

0.32 

3.42 

1.10 

1892  

....       0.65 

0.30 

3.55 

1.14 

1893  

....       0.67 

0.27 

3.82 

1.25 

1894  

....       0.65 

0.16 

3.82 

1.62 

1895  

0.67 

0.15 

3.57 

1.85 

1896  

0.71 

0.10 

3.53 

2.38 

1897  

0.70 

0.10 

3.52 

2.59 

0.82 

0.12 

4.11 

3.02 

1898  

0.73 

0.08 

3.54 

2.75 

0.85 

0.10 

4.09 

3.18 

1899  

0.72 

0.09 

3.58 

3.00 

0.83 

0.10 

4.12 

3.18 

1900  

0.74 

0.08 

3.58 

3.06 

0.84 

0.10 

4.12 

3.52 

1901  

0.72 

0.09 

3.80 

3.46 

0.83 

0.10 

4.36 

3.96 

1902  

0.64 

0.09 

3.76 

3.58 

0.73 

0.10 

4.28 

4.08 

1903  

.....       0.63 

0.08 

3.68 

3.72 

0.72 

0.09 

4.19 

4.24 

1904  

0.63 

0.08 

3.68 

3.92 

0.72 

0.09 

4.20 

4.48 

1905  , 

0.63 

0.07 

3.59 

4.05 

0.72 

0.08 

4.11 

4.64 

1906  

0.63 

0.07 

3.49 

4.07 

0.72 

0.08 

4.01 

4.67 

1907  

0.67 

0.06 

3.36 

4.26 

0.77 

0.07 

3.86 

4.88 

1908  

0.67 

0.06 

3.26 

4.37 

0.75 

0.07 

3.70 

4.96 

1909  

0.62 

0.05 

2.86 

4.35 

0.70 

0.05 

3.23 

4.94 

1910  

0.56 

0.05 

2.54 

4.24 

0.64 

0.06 

2.87 

4.79 

1911  

0.59 

0.04 

2.31 

4.19 

0.68 

0.05 

2.65 

4.77 

[NOTE:     The  remarkable  decrease  in  the  percentage  of  permanent  total  disability 
cases  is  due  mainly  to  a  change  In  the  method  of  classification.] 


Variations  in  Risks  and  Cost — Industrial  Accident  Insurance. 

Based  on  the  number  of  "full-time  workers,"  accidents  from  1897 
to  1908  average  9.11  per  one  thousand.  The  textile  industry  with  3.13 
showed  the  lowest  rate,  while  cartage  and  drayage  with  14.83  showed 
the  highest.  Of  the  66*  industrial  associations,  the  cartage  and  dray- 
age  associations  with  21.18  accidents  stood  at  the  head.  The  tobacco 
association  with  a  rate  of  0.53  brought  up  the  rear. 

Considerable  variation  appears  in  the  risk  ratio  among  associa- 
tions in  the  same  group.  Thus  the  iron  and  steel  associations  for 
Saxony  has  a  rate  of  8.83  as  against  14.57  f°r  the  same  industry  in 
Silesia.  In  the  textile  group,  1.44  is  the  rate  for  the  silk  industry 
and  4.46  for  the  linen  trade.  In  the  building  trade,  the  Hanover  as- 
sociation has  a  rate  of  8.19,  while  that  for  Wurtemburg  reaches  16.49. 
Under  inland  navigation  the  East  German  association  has  a  rate  of 
9.86  and  the  Elbe  association  16.49. 

Accidents  due  to  the  use  of  machinery  average  2.29  for  all  the 
associations.  The  private  railway  association  has  the  lowest  percent- 
age or  only  0.38,  while  the  woodworking  association  has  the  highest 
with  7.31. 

As  to  the  number  of  deaths,  the  textile  industry  has  the  lowest 
rate  of  0.12.  Inland  navigation  stands  at  the  head  with  3.04.  Of 
the  various  associations,  tobacco  with  0.03  makes  the  best  showing 
and  the  West  German  navigation  association  with  3.49  the  worst. 

In  accidents  involving  permanent  total  disablity,  the  textile,  wood- 
working and  food  products  associations  have  the  lowest  rate  of  0.02 ; 
and  the  mining  group  stands  at  the  head  with  0.40.  Permanent  par- 
tial disability  cases  show  the  lowest  rate  of  0.28  for  the  tobacco  asso- 
ciation and  the  highest  rate  of  6.01  for  the  woodworking  industry.  In 
temporary  disability  accidents,  cartage  and  drayage  stands  at  the  head 
with  13.84  and  tobacco  with  0.21  at  the  bottom. 

In  the  matter  of  administration  costs,  a  great  variation  is  to  be 
found.  The  same  depend  on  the  number  of  insured  in  the  various 
associations,  the  number  of  establishments  included,  the  accident  risk 
in  the  industry,  the  territorial  extent,  and  the  form  of  organization 
and  administration.  In  general,  the  smaller  the  accident  risk,  the 
lower  the  administration  costs  are  apt  to  be.  Thus  in  the  tobacco, 
silk  and  textile  industry,  the  accident  ratio  runs  0.53,  1.44,  3.13  against 
administration  costs  of  .36,  .38,  .47  per  1,000  mark  wages,  respectively. 
On  the  other  hand,  cartage  and  drayage,  inland  navigation  and  flour 
milling  with  a  risk  ratio  of  21.18,  13.17,  14.98  show  administrative 
costs  of  3.25,  3.74,  and  4.13,  respectively.  The  chimney  sweeps'  asso- 
ciation with  its  small  membership  of  6,172  insured  persons  shows 
the  highest  administration  costs  of  all  the  associations,  namely  5.19. 

Causes  of  and  Responsibility  for  Industrial  Accidents. 
Between  the  years  1885-1908,  the  various  industrial  accident  as- 

*That  was  the  number  during  the  period  covered  by  the  statistics.     There  are  now 
67  such  associations. 

24 


sociations    reported    1,002,174 
due  to  the  following  causes : 

Machinery    and    elevators..   246,273 

Falling  objects   165,410 

Falls     162,074 

Loading  and  unloading 131,240 

Tools    71,911 

Teaming     61,808 

Unknown   cases    51,792 


"first    time    accidents."     These    were 


Pet. 

24.6 

16.5 

16.2 

13.2 

7.2 

6.2 

5.2 


Railways    40,355 

Inflammable   materials   33,689 

Animals    13,968 

Navigation    10,089 

Explosives    9,993 

Steam    boilers    3,572 


Pet. 
4.0 
3.3 
1.3 
1.0 
1.0 
0.3 


According  to  official  estimates  the  responsibility  for  industrial 
accidents  is  divided  as  follows,  for  the  years  mentioned : 


1907. 

Fault    of    employer 12.06 

"         "     workmen    41.26 

"     both     0.90 

"         "     third  persons 5.94 

Hazard    of    industry    37.65 

Act    of    God..                                                               2.18 


1897. 

16.81 

29.89 
4.66 
5.28 

42.05 
1.31 


1887. 

20.47 

26.56 

4.61 

3.40 

44.96 

not  given 


The  striking  fact  to  be  observed  in  the  above  table  is  the  con- 
stantly increasing  percentage  of  accidents  ascribed  to  the  faults  of 
the  workmen. 

The  Agricultural  Accident  Insurance. 

Taking  up  now  the  statistics  of  the  agricultural  associations,  the 
figures  of  accidents  run  differently.  In  1888,  5,576,765  persons  were 
assumed  to  be  insured;  8,088,698  in  1889  and  1890;  12,289,415  in  the 
years  1891-1895;  11,189,071  from  1896-1907,  and  17,179,000  from  1908 
on.  The  accidents  reported  group  themselves  as  follows : 


First 

Accounts 

Time 

Year. 

Reported. 

Acc'ts. 

1888  

5,102 

808 

1889  

19,542 

6,631 

1890  

32,186 

12,573 

1891  

42,296 

19,359 

1892  

50,236 

23,231 

1893  

59,006 

27,553 

1894  

68,751 

32,491 

1895  

80,598 

37,383 

1896  

91,099 

42,934 

1897  

98,363 

45,438 

1898  

103,159 

47,683 

1899  

107,861 

51,287 

1900  

106,917 

50,311 

1901  

116,185 

55,983 

1902  

122,532 

57,934 

1903  

133,085 

62,397 

1904  

146,306 

66,003 

1905  

144,939 

66,335 

1906  

144,289 

61,887 

1907  

141,975 

62,673 

1908  

143,075 

61,609 

1909  

138,785 

61  ,240 

1910  

131,671 

56,525 

1911  

136,469 

55,587 

Total 

Perm. 

Accidents 

Total 

Treated. 

Deaths. 

Disab. 

808 

354 

43 

7,271 

1,368 

260 

18,252 

1,877 

438 

34,338 

2,153 

644 

52,325 

2,026 

785 

72,336 

2,142 

770 

94,422 

2,261 

560 

121,240 

2,213 

571 

149,963 

2,363 

623 

177,421 

2,474 

544 

202,848 

2,598 

332 

229,329 

2,608 

440 

250,379 

2,662 

511 

276,993 

2,751 

568 

304,386 

2,672 

541 

322,735 

2,893 

604 

362,081 

2,948 

668 

387,412 

2,907 

610 

400,831 

2,872 

593 

415,847 

2,843 

507 

422,848 

2,980 

371 

431,085 

2,942 

443 

425,897 

2,788 

423 

420,784 

2,853 

399 

Perm. 
Part. 
Oisab. 
180 
2,663 
5,404 
8,873 
11,012 
14,899 
17,185 
19,529 
22,222 
23,260 
23,366 
25,313 
24,181 
25,954 
26,408 
28,379 
31,428 
32,009 
28,580 
27,049 
25,573 
24,640 
21,593 
21,026 


Temp. 

Dlsab. 

231 

2,340 
4,854 
7,689 
9,408 
9,743 
12,485 
15,070 
17,726 
19,160 
21,387 
22,926 
22,957 
26,710 
28,313 
20,521 
30,959 
30,809 
29,842 
32,274 
33,685 
33,215 
31,721 
31,309 


It  appears  from  the  above  tables  that  both  reported  and  "first 
time  accidents"  grew  uninterruptedly  for  many  years,  the  former 
having  reached  their  maximum  in  1903  and  the  latter  in  1905.  Of 
late  years,  both  show  a  declining  tendency.  In  place  of  reaching  50% 
of  all  those  reported,  as  for  the  period  1888-1908,  "first  time  acci- 
dents" are  now  only  40%,  which  would  indicate  a  more  strict  con- 
trol. The  number  of  deaths  per  annum  remains  about  the  same,  while 
there  has  been  a  marked  decrease  in  the  number  of  accidents  involv- 
ing permanent  total  or  permanent  partial  disability. 

Causes  of  Agricultural  Accidents. 

The  causes  of  the  892,503  agricultural  accidents  incurred  from 
the  inauguration  of  the  law  up  to  the  end  of  1908  are  given  as  follows : 

Nature.  Number.             Per  Cent. 

Falls  from   ladders,  etc 253,373  28.39 

Teaming    155,738  17.45 

Animals    123,686  13.86 

Engines,  motors,  etc 77,448                      8.68 

Tools     72,045                        8.07 

Loading   and    unloading 70,729                      7.92 

Unknown     69,046                       7.74 

Falling    objects    57,779                      6.47 

Inflammable  substances  7,788                      0.87 

Explosives    2,803                       0.31 

Railways   1,209                      0.14 

Navigation    612                      0.07 

Steam  boilers 241                      0.03 

In  explanation  of  the  above  table,  it  should  be  said  that  falls  in- 
clude those  from  scaffoldings,  stairs,  ladders,  lofts,  trees,  haystacks, 
and  into  ditches,  wells  and  cellars.  Teaming  covers  falls  from  ve- 
hicles while  driving  or  getting  on  or  off,  and  accidents  suffered  while 
leading  or  driving  animals  on  foot.  Animal  accidents  cover  those 
incurred  in  feeding  and  handling  animals,  cleaning  stables,  plough- 
ing and  harvesting,  harnessing  and  unharnessing,  milking,  riding,  etc. 
Falling  objects  include  injuries  received  through  the  sliding  of  masses 
of  earth,  and  the  falling  of  trees,  branches  or  parts  of  buildings,  etc. 

As  compared  with  1905,  "first  time  accidents"  in  1911  show  a  de- 
crease of  10,748  or  almost  one-sixth.  While  there  has  been  a  diminu- 
tion in  all  classes  of  accidents,  the  largest  decrease  proportionately 
has  been  under  the  sub-division  falls.  Here  the  total  has  dropped 
from  18,879  to  14,618.  A  bad  crop  year  is  usually  marked  by  a  falling 
off  in  the  number  of  accidents,  as  there  is  less  harvesting  and  other 
agricultural  work  to  do.  A  good  fruit  year  means  more  accidents 
due  to  falls  from  trees.  Machinery  accidents  now  average  about  8% 
of  all  as  against  13.97%  in  1890. 

In  1901,  the  "first  time  accidents"  in  agriculture  were  grouped 
as  follows : 

Cultivation    of    fields 19,361  34.02%  Vineyards    403           0.71% 

Cultivation   of  gardens. ..     2,638           4.64  Housework    3,058           5.37 

Work    in    forests 5,718  10.05  All   others    20,926  26.77 

Meadow    and    pasture 4,803          8.44 

26 


The  nature  of  the  ground  has  thus  much  to  do  with  the  number 
of  accidents  incurred  and  accounts  in  part  for  the  extraordinary  dif- 
ference shown  by  the  various  agricultural  associations  in  the  degree 
of  risk  per  1,000  insured.  For  the  period  1888-1908  it  varied  from  1.42 
for  the  Lippe  association  to  5.66  for  that  of  Weimar.  Again,  the  char- 
acter of  the  country  exerts  an  important  influence  on  the  kinds  of  acci- 
dents incurred.  Thus,  while  accidents  due  to  loading  and  unloading 
run  7.93  out  of  every  100  for  all  Germany,  they  foot  up  14.47:  for  the 
Baden  association.  This  exceptionally  high  rate  is  to  be  explained  by 
the  fact  that  the  hilly  territory  covered  by  the  Black  Forest  is  included 
in  the  Baden  association,  where  the  loading  and  unloading  of  materials 
is  attended  with  a  much  higher  degree  of  risk  on  account  of  the  steep 
and  uneven  roads.  Another  factor  of  importance  affecting  the  num- 
ber and  the  time  of  accidents  is  the  relative  intelligence  of  the  popu- 
lation. Thus  in  Silesia,  the  number  of  illiterate  and  untrained  for- 
eign agricultural  laborers  is  higher  than  anywhere  else  in  Germany. 
Consequently  we  find  a  risk  ratio  much  above  the  average  and  acci- 
dents resulting  from  the  use  of  tools  forming  one-sixth  of  all  as  against 
an  average  of  &%  for  the  country  as  a  whole. 

Responsibility  for  Agricultural  Accidents. 

Responsibility  for  accidents  incurred  in  agricultural  pursuits  is 
apportioned  as  follows: 

1901.  1891. 

Unavoidable  danger  of  Industry 49.23  51.38 

Fault  of  laborer 27.90  24.99 

Fault  of  employer    17.67  18.61 

Fault  of  both  and  third  persons 2.63  2.81 

Act  of  God,  etc 2.57  2.21 

Over  one-half  of  all  accidents  are  therefore  ascribed  to  unavoid- 
able causes  such  as  inherent  dangers  of  the  occupation  or  act  of  God. 

Expenditures,  etc. — Agricultural  Accident  Insurance. 

The  total  expenditures,  in  marks,  of  the  agricultural  accident  as- 
sociations have  been  as  follows: 

Total  Total 

Year.  Expenditures.  Year.  Expenditures. 

1888 461,796.50  1900 23,466,522.37 

1889 1,714,327.80  1901 26,313,999.03 

1890 3,392,786.97  1902 29,489,353.11 

1891 5,608,773.25  1903 32,295,075.52 

1892 7,469,903.52  1904 34,736,861.27 

1893 9,439,471.04  1905 36,911,032.22 

1894 11,880,812.26  1906 37,877,491.54 

1895 13,519,057.73  1907 38,916,819.68 

1896 16,072,386.81  1908 39,877,920.43 

1897 18,182,155.85  1909 40,436,477.13 

1898 19,853,845.34  1910 40,886,410.67 

1899 21,849,791.77  1911 40,587,815.27 

27 


The  following  table  regarding  pensions  paid,  in  marks,  to  those 
injured  in  agricultural  accidents  is  also  of  interest : 


Year. 

1888 

Number 
Pensioners. 
376 

Pensions 
Paid. 
14,857 

Year. 

1900 

Number 
Pensioners. 
228,882 

1889  

5,277 

423,789 

1S01    

253,067 

1890     .  . 

15,136 

1,288,371 

1902  

.  .    .           278,907 

1891  

27,942 

2,505,680 

1903  

306,994 

1892 

45  861 

3  793  397 

1904 

333,946 

1893 

64,203 

5,125,148 

1905  

.  .  .  .           358,830 

1894  

85,234 

6,647,878 

1906  

372,143 

1895 

109,363 

8,175,673 

1907  

384,943 

1896 

136,370 

9  987  613 

1908 

389,319 

1897 

161,707 

11,508,240 

1909  

391,233 

1898 

186,396 

12,934,817 

1910 

385,876 

1899... 

210,330 

14,391,680 

1911.  . 

380,83-5 

Pensions 

Paid. 
15,699,208 
17,470,438 
19,327,972 
21,518,897 
83,268,863 
24,674,306 
24,252,100 
85,669,082 
25,912,466 
26,032,546 
25,821,994 
25,506,206 


Cost  of  Accident  Compensation  Hidden  by  Confusing  Practices. 

While  in  other  countries,  like  France  and  Holland,  one  is  able  to 
tell  with  some  accuracy  the  actual  cost  of  workingmen's  accident  in- 
surance, it  is  impossible  to  do  so  in  the  case  of  Germany.  For  1911 
the  sum  total  of  all  expenditures  of  all  the  accident  associations  is 
stated  in  the  official  reports  to  be  202  million  marks ;  but  these  figures 
include  only  the  outlays  of  the  employers'  accident  insurance  asso- 
ciations. No  statistics  are  available  to  show  what  it  cost  the  sick- 
ness societies  to  treat  the  minor  accidents  of  less  than  three  months' 
disability  and  the  major  accidents  during  the  first  three  months.  A 
second  unknown  quantity  is  the  cost  of  the  services  rendered  by  the 
central  and  local  State  governments  and  of  the  quota  assumed  by 
them  of  the  expenses  of  the  employers'  associations.  Again,  in  1911, 
for  example,  1,018,075  workmen  in  all  were  in  receipt  of  indemnities 
for  accidents  incurred.  The  pensions  of  all  of  them  were  paid  through 
the  post  office,  which  in  turn  charged  the  employers'  associations 
with  the  total  thereof  payable  in  June,  1912.  The  associations  are 
thus  not  only  saved  all  the  expenses  of  distribution,  but  also  are  pre- 
sented with  from  five  to  seventeen  months'  interest  on  all  the  monthly 
compensation  payments  made  for  their  account  by  the  postal  authori- 
ties— a  no  inconsiderable  sum. 

Another  confusing  factor  arises  through  the  Germans  having 
adopted  generally  the  "current  cost"  as  distinguished  from  the  "capi- 
tal reserve"  plan  of  providing  for  deferred  payments  on  losses.  For 
instance,  the  amount  payable  in  the  current  year  on  the  "first  time 
accidents"  incurred  by  the  employers'  industrial  associations  in  1886 
(the  first  full  year  of  accident  insurance)  was  1,720,800  marks.  In- 
stead of  requiring  their  members  to  advance  16,372,600  marks — which 
would  have  provided  for  the  annuities  due  to  all  the  victims  and  thus 
done  away  with  all  further  assessments  for  losses  incurred  in  1886 — 
the  associations  merely  asked  them  to  contribute  the  current  cost  for 
the  year*  or  1,720,800  marks,  thereby  leaving  15,164,600  marks  to  be 

*Pluf  »mail  contributions  towards  partial  reserves. 


28 


paid  in  the  following  years  on  account  of  the  losses  of  1886.  Through 
this  system  of  deferring  the  evil  day  of  liquidation  and  of  paying  only 
what  they  have  to  from  year  to  year,  the  associations  were  able  to 
show  low  expenditures  at  the  outset,  but  with  a  constantly  rising  in- 
surance cost.  This  is  brought  out  in  the  following  table  relating  to 
the  industrial  accident  associations  only : 


Compensation 

Wages  Actually  Rate 

Paid  In  Paid  In  Per  1,000  "First 

Million  Thousand  Marks           Time 

Year.  Marks.  Marks.  Wages.  Losses.' 

1885 475.8              

1886 2,228.3  1,720.8  0.77               1,720.8 

1887 2,389.3  5,342.5  2.25               3,093.1 

1888 2,646.0  8,615.4  3.27               3,653.7 

1889 2,947.1  12,203.7  4.17               4,281.8 

1890 3,183.8  16,252.4  5.13               5,006.1 

1891 3,318.4  20,184.5  6.13               5,314.5 

1892 3,292.7  23,861.5  7.28               5,628.2 

1893 3,366.5  27,333.5  8.16               5,958.1 

1894 3,431.7  30,975.2  9.07               6,922.2 

1895 3,577.3  34,374.1  9.64               6,477.9 

1896 3,922.9  38,653.3  9.87               7,294,2 

1897 4,253.6  42,933.3  10.18               7,778.8 

1898 4,643.4  47,621.3  10.27               8,490.0 

1899 ,.  5,008.8  52,747.7  10.54               9,258.0 

1900 5,399.1  58,494.8  10.85  10,088.3 

1901 5,710.4  67,120.5  12.17  11,818.3 

1902 6,115.1  72,987.5  12.80  12,217.2 

1903 6,115.1  79,337.2  12.98  12,767.3 

1904 6,538.3  85,882.2  13.14  13,540.1 

1905 6,996.6  92,263.0  13.19  14,182.0 

1906 7,714.9  97,951.0  12.70  14,882.3 

f907 8,410.1  104,518.1  12.43  16,155.5 

1908 8,463.6  110,157.4  13.02  16,971.1 

1909 8,567.3  113,536.8  13.25  16,148.9 

1910 9,187.6  115,176.0  12.54  15,313.6 

1911 9,932.5  117,322.5  11.80  15,449.2 


Estimated 
Capital- 
ized Values, 
Same  In 
Thousand 
Marks. 


Est'd  Dlf. 

Bet.  Cap. 
Values  and 
Comp.  Paid 

In  Thou- 
sand Marks. 


16,372.6 

29,429.4 

34,763.3 

40,739.4 

47,630.7 

50,565.0 

53,549.7 

56,688.6 

59,967.4 

61,634.2 

69,401.0 

74,011.7 

80,778.4 

88,058.6 

95,985.5 

112,445.7 

116,241.0 

121,475.0 

128,827.8 

134,935.2 

141,598.2 

153,712.2 

161,464.2 

153,649.6 

145,701.2 

146,991.8 


15,164.6 

40,625.3 

69,110.3 

101,063.6 

137,077.4 

173,318.9 

210,112.3 

247,848.8 

286,426.9 

324,666.0 

367,853.2 

412,894.2 

461,663.1 

514,396.0 

571,202.7 

638,106.4 

705,207.5 

773,502.4 

845,023.7 

918,765.3 

996,096.9 

1,081,876.3 

1,172,904.5 

1,255,572.9 

1,331,011.5 

1,408,304.4 


Under  the  column  "Rate  per  1000  marks  wages"  is  given  the 
actual  expenditure  for  compensation  per  1,000  marks  of  wages.  For 
the  period  1885-1911,  this  averages  10.77,  or  I-°77  Per  IO°  marks  of 
total  wages. 

Taking  the  capitalized  values  of  unpaid  losses  outstanding  at  the 
end  of  1911  as  1,408,304,400  marks,  the  actual  reserves  of  the  industrial 
associations  at  that  date  totaled  only  309,574,574  marks,  leaving  a  de- 
ficit of  almost  1,100  million  marks.  As  the  grand  total  of  wages  for 
this  27-year  period  was  137,240.6  million  marks,  annual  premiums  or 
contributions  would  have  had  to  have  been  about  four-fifths  of  one 
per  cent  higher  if  losses  had  been  provided  for  on  the  capitalized 
value  basis  instead  of  the  current  cost  assessment  plan. 

Of  the  117,322,555  marks  paid  as  compensation  for  accidents  in 
1911,  15,449,178  was  expended  for  "first  time  accidents"  and  102,113,- 
377  f°r  accidents  incurred  in  previous  years.  Even  if  we  add  to  this 
the  21,155,497  marks  that  year  paid  into  the  reserve  fund,  the  amount 
is  not  equal  to  the  capitalized  value  of  the  cost  of  the  "first  time  acci- 


dents"  of  1911.  Consequently,  the  deficit  in  reserves  is  still  on  the 
increase,  and  a  rising  insurance  cost  for  the  industrial  associations 
may  be  expected  for  some  time  to  come.  For  how  long  and  to  what 
extent  that  cost  will  rise  before  a  state  of  equilibrium  is  reached,  it 
is  impossible  to  predict  with  exactitude. 

In  consequence  of  all  these  uncertain  elements,  and  of  the  post- 
ponement and  division  of  expenditures,  no  one  can  pass  an  intelligent 
opinion  as  to  whether  the  German  method  of  meeting  the  expenses 
of  workingmen's  accidents  is  very  costly  and  uneconomical  or  not. 
It  is  at  any  rate  a  very  cumbersome  and  involved  system  and  one  ad- 
mirably fitted  to  conceal  the  truth — although,  of  course,  it  was  not  de- 
vised for  any  such  purpose. 


LESSONS  FROM  GERMANY'S  EXPERIENCE 

Mistaken  Provisions  in  the  Accident  Insurance  Law — Errors  in  In- 
terpretation and  Administration — Proposed  Reforms. 


In  view  of  the  fact  that  Germany  was  the  first  nation  to  attempt 
this  kind  of  legislation,  it  is  not  surprising  to  find  defects  in  its  statute 
calling  for  the  compulsory  insurance  of  workingmen  against  the  con- 
sequences of  accidents.  A  pioneer  has  to  blaze  the  path  for  others, 
and  it  is  hardly  fair  to  blame  him  severely  if  he  fails  to  find  the  least 
objectionable  route  and  the  one  freest  from  dangers.  But  there  can 
be  no  excuse  for  such  as  would  enter  on  a  similar  track  not  avoiding 
like  snares  and  pitfalls  to  those  which  have  led  astray  the  one  who 
hewed  the  way.  Therefore  it  behooves  all  would-be  imitators  of  a 
compulsory  accident  insurance  system  not  to  follow  the  German  ex- 
ample blindly,  but  rather  to  select  the  line  of  procedure  which  the 
experience  of  Germany  indicates  as  the  best. 

At  the  outset,  it  is  proper  to  call  attention  to  the  difference  be- 
tween a  select  system  of  private  insurance  and  one  carried  out  on  a 
large  scale,  as  results  when  compulsory  workingmen's  insurance  laws 
are  enacted.  To  quote  the  words  of  a  prominent  Germany  official : 

"General  workingmen's  insurance  differs  from  private  insurance  principal- 
ly in  two  points— in  the  prodigious  number  of  risks  and  in  the  indiscriminate 
insurance  of  all  risks,  even  of  the  worst  possible  kind.  The  enormous  number 
of  risks  itself  causes  cases  where  covetousness  comes  into  play  to  be  corres- 
pondingly more  numerous  than  in  private  insurance.  Another  unfavorable  in- 
fluence on  the  number  of  cases  of  covetousness  is  the  entire  absence  of  exclu- 
sion of  unfavorable  risks.  At  least,  as  far  as  accident  insurance  is  concerned, 
all  persons  eligible  for  this  insurance  come  under  its  protecting  care  irrespec- 
tive of  age,  sickness  or  infirmities.  In  this  way,  a  wide  opportunity  is  pre- 
sented for  ascribing  to  accident  the  consequences  of  old  age  or  of  illness,  which 
in  reality  have  had  nothing  to  do  with  an  accident.  Furthermore,  the  moral 
qualities  of  the  insured  are  left  out  of  account  where  general  insurance  pre- 
vails. The  danger  is  thereby  increased  of  the  public  as  a  whole  being  improper- 
ly exploited  by  the  individual."* 

This  being  the  inevitable  and  unavoidable  case,  it  becomes  all 
the  more  important  to  have  workmen's  compensation  laws  made  as 
defect  free  as  possible.  If  the  slightest  loophole  presents  itself  for 
securing  an  unfair  and  an  unintended  advantage,  the  worthless  mem- 
bers of  society  will  not  hesitate  to  avail  themselves  of  this  opening, 
even  to  the  extent  of  using  dishonest  means.  If  the  body  politic  is 
to  be  kept  in  a  healthy  condition  and  free  from  contaminating  in- 
fluences, every  avenue  of  approach  should  be  carefully  guarded  so  as 
to  prevent  the  undesirable  element  from  gaining  a  foothold.  Once 
they  find  out  a  weak  spot  in  the  law  and  a  point  to  begin  their  un- 

*Stahl;  Westphalian  Alliance   Report,   p.   12. 


desirable  practices,  their  example  will  prove  contagious,  with  the  re- 
sultant infection  and  demoralization  of  the  sound  part  of  the  popula- 
tion. The  only  way  to  pass  a  workmen's  compensation  act  of  any 
kind  with  beneficial  results  to  all  concerned  is  to  make  the  occurrence 
of  abuses  under  it  impossible  as  far  as  human  foresight  can  foresee. 
Half-way  measures  or  compromises  will  not  do  and  are  bound  to 
cause  pernicious  consequences. 

Divided  Responsibility  for  Accident  Cases. 

Divided  responsibility  seldom  leads  to  satisfactory  results;  and 
this  has  again  been  proved  true  from  the  workings  of  the  German 
accident  law,  which  makes  both  the  sickness  societies  and  the  em- 
ployers' associations  obliged  to  look  after  the  injured.  The  care  for 
the  first  13  weeks  devolves  on  the  former,  and  thereafter  the  em- 
ployers' associations  take  charge.  It  is  often  difficult  to  determine 
whether  an  injury  was  caused  by  an  occupational  accident  or  whether 
it  is  really  to  be  ascribed  to  the  consequences  of  a  previous  illness. 
But,  as  the  victim  requires  prompt  treatment,  the  German  law  directs 
that,  in  every  case,  the  sickness  societies  must  give  the  first  aid  jto 
the  injured.  Not  until  the  long  waiting  period  of  13  weeks  has  ex- 
pired can  the  employers'  association  step  in  and  direct  the  treatment. 
During  this  waiting  period,  the  sickness  society  is  financially  inter- 
ested in  proving  that  an  occupational  accident  caused  the  injury. 
Once  that  fact  has  been  established,  it  is  not  particularly  concerned 
with  the  further  history  of  the  case,  or  in  seeing  that  the  treatment 
is  properly  followed  up.  This  gives  those  their  opportunity  who, 
consciously  or  unconsciously,  are  bent  on  deriving  as  large  a  pecuniary 
profit  as  possible  from  an  accident.  After  the  expiration  of  13  weeks, 
when  the  employers'  association  first  takes  hold,  it  is  usually  ex- 
tremely difficult  to  prove  that  certain  symptoms — especially  nervous 
troubles — existed  before  the  accident.  Nor  can  the  appliances  for  re- 
storing flexibility  to  broken  or  dislocated  limbs  be  then  applied  with 
much  hope  of  success,  as  they  must  be  made  use  of  within  two  weeks 
after  injury  if  the  proper  results  are  to  be  obtained. 

Realizing  this  weakness  in  their  accident  insurance  system,  the 
German  authorities  early  sought  to  better  matters  by  allowing  the 
employers'  associations  to  take  over  the  treatment  of  accident  pa- 
tients before  the  expiration  of  the  waiting  period,  if  they  so  desired. 
But,  owing  to  the  difficulties  raised  by  the  sickness  societies,  very 
little  use  has  thus  far  been  made  of  this  privilege.  In  1910,  only 
2.63%  of  all  reported  accidents  were  taken  over  by  the  employers' 
associations  before  the  13  weeks'  limit  was  passed.  Recently  the 
procedure  enabling  the  employers'  associations  to  take  charge  of  ac- 
cident patients  from  the  outset  has  been  simplified  and  it  is  hoped 
that  they  will  do  this  to  a  much  greater  extent  than  before.  In  order 
to  prevent  unscrupulous  persons  from  deriving  a  profit  from  this  sys- 
tem of  double  treatment — first  at  the  hands  of  the  societies  and  then 
of  the  associations — many  physicians  and  the  most  experienced  offi- 
cials are  urging  the  abolition  of  the  waiting  period  so  that  all  acci- 
dents would  be  looked  after  by  the  employers'  associations  from  the 

3« 


start.  That  is  certainly  a  reform  to  be  greatly  desired,  for  it  would 
produce  uniformity  in  the  treatment  of  accident  cases  under  the  charge 
of  the  organizations  most  directly  interested  in  having  the  injured 
workmen  attain  their  former  working  capacity.  The  opportunity  for 
fraudulent  practices  and  for  falsely  ascribing  previously  diseased  con- 
ditions to  accidents  would  also  be  greatly  lessened. 

It  is  difficult  for  anyone  to  say  how  serious  are  the  results  of  the 
double  system  of  handling  accidents  in  vogue  in  Germany.  As  bear- 
ing on  this  point,  however,  a  comparison  of  the  consequences  of  in- 
dustrial accidents  in  Germany  and  Holland  is  instructive. 

Per  1,000 

^-Full-Time  Workers-^ 

Accident  Per  Over  Over 

,-1,000  Full-Time  Workers-^  13  Weeks.  6  Weeks. 

Year.                                                       Germany.              Holland.  Germany.  Holland, 

1S03 54.35                         65.9  9.24  5.4 

1904 : 57.21                         77.  9.49  6.8 

1905 57.09                         83.6  9.55  6.8 

1906 60.                             92.  9.48  7.4 

1907 59.12                         94.8  9.58  8.2 

1908 58.10                         88.5  9.48  9.1 

1909 58.62                         82.9  8.93  7.9 

1910 58.38                         79.8  8.36  7.7 

1911 60.12                         81.2  8.14  7.6 

Average 58.18  82.7  9.14  7.43 

In  the  German  figures  of  accidents  reported  are  included  all  ac- 
cidents in  excess  of  three  days'  disability  and  probably  many  others, 
while  the  Dutch  figures  take  in  accidents  resulting  in  more  than  twq 
days'  disability.  In  spite  of  this  exclusion  of  all  minor  accidents  from 
the  Dutch  statistics,  Holland  is  far  ahead  of  Germany  in  the  ratio  of 
accidents  reported.  The  figures  average  82.7  for  the  former  as  against 
58.18  per  1000  for  the  latter.  When  it  comes  to  the  results  of  acci- 
dents and  the  duration  of  disability,  however,  the  showing  is  quite 
different.  Here  the  German  figures  are  far  in  the  lead.  On  the  aver- 
age, the  number  still  under  treatment  in  Holland  at  the  end  of  six 
weeks  runs  only  7.43  per  thousand  as  against  9.14  still  unrestored  in 
Germany  at  the  end  of  thirteen  weeks.  In  other  words,  over  90  per 
cent  of  all  accident  cases  in  Holland  are  discharged  as  cured  at  the 
end  of  six  weeks,  while  in  Germany  at  the  end  of  thirteen  weeks  one- 
sixth  of  all  cases  are  still  under  treatment.  This  showing  is  all  the 
more  remarkable,  for  the  reason  that  the  Germans  claim  to  have  far 
more  accident  preventing  devices  and  better  surgical  apparatus  for 
the  treatment  of  accidents  than  any  other  nation.  Undoubtedly  the, 
shifting  of  accident  cases  between  sickness  societies  and  accident  as- 
sociations has  something  to  do  with  the  poorer  results  attained  in 
Germany. 

Excessive  Litigation  Fostered. 

Another  provision  of  the  German  law  giving  rise  to  great  com- 
plaint is  that  regarding  appeals  to  the  courts.  When  a  person  has 

33 


been  injured,  his  pension  is  determined  by  the  employers'  associa- 
tion. If  dissatisfied  with  the  award,  the  statute  gives  the  victim  the 
right  to  appeal,  free  of  charge,  first  to  a  court  of  arbitration*  and 
later  again  to  the  imperial  insurance  office.  As  the  workingman  can 
thus  prosecute  a  lawsuit  without  expense  to  himself,  the  inevitable 
result  has  been  to  encourage  an  immense  amount  of  entirely  uncalled 
for  litigation.  While  only  one  decision  in  fourteen  is  appealed  from 
in  France,  one-sixth  of  all  those  rendered  in  Germany  are  excepted  to. 
The  official  statistics  set  this  out  in  detail : 


Year. 
1890             

Awards  Open 
to  Revision. 
68,684 

Awards 
Appealed 
to  Arbi- 
tration Court. 
14,879 
33,553 
46,655 
68,742 
72,917 
70,023 

Per  Cent  Ap- 
peals Decided 
Per  Cent           in  Favor 
Appealed.         Workmen. 
21.66                     35.59 
23.34                     27.88 
21.01                      26.42 
17.38                     22.79 
17.49                      17.15 
16.48                      15.58 

1895 

143,783 

1900   

217,333 

1905 

395,563 

1910   

416,913 

1912... 

424,855 

Appeals  from  the  courts  of  arbitration  to  the  Imperial  Insurance 
Office  make  the  following  showing: 

Per  Cent 

Number  Per  Cent  Original 

Decisions  of  Possible  Decisions 

Year.                                                                              Appealed.  Appeals.  Confirmed. 

1890 2,354  23.33  73.7 

1895 7,806  28.56  73.9 

1900 11,048  26.68  69.9 

1905 17,422  27.91  71.8 

1910 25,666  28.79  72.1 

1912 22,827  25.72  73.9 

Not  only  is  the  number  of  appeals  taken  appalling,  but  the  ma- 
jority of  them  are  absolutely  unwarranted.  Thus  in  1912,  of  the 
appeals  taken  to  the  courts  of  arbitration  only  15.58%  were  decided 
in  favor  of  the  workmen — 74.02%  being  affirmed  without  change.  In 
the  appeals  to  the  higher  court  of  the  imperial  insurance  office  80.9% 
of  the  workmen's  appeals  were  denied  and  73-9%  of  all  appeals  af- 
firmed. The  workmen  were  responsible  for  four-fifths  of  all  the  ap- 
peals taken.  The  courts  are  simply  overwhelmed  by  the  avalanche 
of  cases  and  are  falling  more  and  more  behind  in  their  work.  In  1900, 
63%  of  all  appeals  to  the  courts  of  arbitration  were  decided  in  the 
same  year  in  which  they  were  taken,  in  1911  only  22%.  At  the  end 
of  1912,  134,567  undecided  cases  were  pending  in  these  courts,  a 
figure  never  before  reached. 

So  serious  has  this  overburdening  of  the  highest  court  of  the  im- 
perial insurance  office  become  that  a  different  arrangement  has  re- 
cently been  adopted,  limiting  appeals  in  some  instances  and  simplify- 
ing methods  of  procedure.  But  this  is  a  mere  palliative  measure. 
The  real  way  to  put  an  end  to  this  unwarranted  litigation  is  to  do 
away  with  the  workman's  right  of  appeal  free  of  charge.  If  he  had 
to  pay  as  loser  the  costs  of  a  wholly  unmeritorious  appeal,  he  would 
think  twice  before  taking  an  appeal  unless  he  had  good  grounds  to 

*Code  of  1911  makes  a  change  In  this  procedure. 

24 


do  so.  It  is  doubtful,  however,  whether  this  much  to  be  desired  re- 
form will  be  carried  out  in  the  near  future.  The  fear  of  offending 
the  workingman  and  of  losing  the  labor  vote  makes  all  the  German 
political  parties  afraid  to  advocate  the  change. 

Why  exemption  from  all  costs  on  appeal,  regardless  of  the  merits, 
should  have  been  inserted  in  the  law  alongside  of  the  workman's 
right  to  appeal  is  difficult  to  explain,  except  on  the  ground  that  it  was 
intended  as  a  sop  to  the  radical  labor  vote.  It  is  not  to  be  found  in 
countries  like  France  and  Belgium.  Anyone  could  have  foreseen  that 
it  would  certainly  result  in  breeding  a  mass  of  unnecessary  litigation. 
From  the  standpoint  of  the  workingman's  best  interest,  the  insertion 
of  such  a  provision  was  bound  to  be  disastrous.  No  worse  service 
could  have  been  rendered  him  than  to  facilitate  his  carrying  on  law- 
suits regarding  his  compensation  in  accident  cases.  Instead  of  turn- 
ing his  attention  to  the  question  of  getting  well,  his  thoughts  are 
thereby  centered  more  about  matters  of  litigation  and  the  prospects 
of  his  suit.  His  actions  too  are  governed  with  a  view  to  its  outcome, 
and  he  often  fears  to  resume  work  lest  that  fact  may  influence  the 
result.  As  prompt  judgments  are  no  longer  rendered  owing  to  the 
clogged  condition  of  the  courts,  habits  of  idleness  too  are  often  ac- 
quired while  awaiting  a  final  decision.  Finally,  as  one  prominent 
German  has  pointed  out,  the  ease  with  which  the  insured — thanks  to 
judicial  proceedings  being  free  of  cost, — are  enabled  to  prosecute 
claims  of  doubtful  validity  is  one  of  the  leading  causes  that  has  helped 
to  spread  the  pension  mania  from  which  the  German  working  popula- 
tion is  now  suffering.  All  these  evils  flow  from  one  single  unwise  pro- 
vision in  the  law,  and  prove  again  how  carefully  the  effect  of  every 
sentence  in  a  workmen's  compensation  act  should  be  weighed. 

The  Pension  Fetish. 

In  1910  the  German  imperial  insurance  office  issued  a  jubilee 
publication  to  commemorate  the  twenty-fifth  anniversary  of  the  first 
introduction  in  Germany  of  a  system  of  social  insurance.  In  this  pub- 
lication, the  following  sentence  occurs : 

"The  system  of  social  insurance  against  accident  and  infirmity  would 
have  failed  of  its  object  had  not  the  method  of  pension  been  preferred.  Only 
in  this  way  is  it  possible  to  provide  adequately  against  need  and  to  secure 
to  people  of  small  means,  during  loss  of  earning  capacity  caused  by  accident  or 
infirmity,  a  care  which  cannot  be  sacrificed  owing  to  improvident  conduct  or 
misfortune,  as  may  easily  happen  where  compensation  takes  the  form — so 
largely  favored  by  private  insurance — of  a  lump-sum  payment."* 

To  judge  from  the  foregoing  citation,  a  large  part  of  the  success 
of  German  social  insurance  is  due  to  the  adoption  of  the  pension 
system  for  the  settling  of  indemnities  for  disabilities.  As  a  matter 
of  fact,  however,  the  hide-bound  adhesion  to  the  pension  system  has 
been  deemed  by  many  a  great  defect  in  the  German  accident  insur- 
ance law,  and  a  source  of  many  evils. 

*"Das  Relchsversicherungsamt  und  die  Deutsche  Arbelterverslcherung,"   (cf.  "Bib- 
liography," last  page),  p.  88. 

35 


Originally  the  statute  provided  for  lump  sum  payments  only  to 
injured  foreigners,  but  in  1900  the  German  workman  was  given  the 
right  to  ask  for  a  lump  sum  payment  when  a  pension  of  15%  or  less 
of  his  usual  wages  was  awarded  him.  Little  use  has  been  made  of 
this  provision,  however.  In  1909,  the  lump  sum  payments  were 
granted  to  5,405  cases  out  of  a  total  of  139,070  cases  in  which  com- 
pensation was  paid  for  the  first  time.  The  government  has  attempted 
to  have  all  pensions  of  less  than  20%  settled  on  the  lump  sum  plan 
irrespective  of  the  consent  of  the  injured  party,  but  a  majority  of  the 
Reichstag  failed  to  give  its  assent  thereto. 

Lump  sum  payments  have  been  objected  to  on  the  ground  that 
the  shiftless  and  improvident  workmen  soon  waste  or  dissipate  the 
money  paid  them,  and  then  become  dependent  on  the  poor  relief 
system.  On  the  other  hand,  it  is  urged  that  the  effect  on  the  least 
worthy  of  the  working  population  should  not  be  considered  alone, 
and  that  it  is  more  important  to  preserve  the  average  normal  work- 
man from  falling  a  victim  to  chronic  disease. 

On  this  point  we  may  quote  a  German  medical  authority: 

"As  domestic  and  foreign  experience  has  proven  that  the  system  of  lump 
sum  payments  has  a  very  much  better  influence  on  the  restoration  of  neurotics 
than  the  granting  of  pensions,  a  judicious  lump  sum  settlement  for  neurotics 
(if  traumatic  neuroses  are  not  indeed  to  be  barred  from  all  compensation), 
would  be,  irrespective  of  the  size  of  the  pension  granted,  a  great  step  forward 
in  social  insurance  and  a  blessing  for  these  poor  sufferers."* 

Switzerland  is  one  of  the  countries  where  accidents  causing  ner- 
vous disorders  are  settled  by  lump  sum  payments.  On  the  effect 
of  this  system,  a  leading  physician  writes  in  a  Swiss  medical  journal  r 

"In  Switzerland,  accident  neuroses  are  generally  settled  by  lump  sum  pay- 
ments and  are  cured  by  them.  *  *  *  In  Switzerland,  there  are  no  unhealed 
neuroses  two  years  after  lump  sum  payments  are  made."f 

At  another  time  he  speaks  of  138  cases  of  traumatic  neurosis  ex- 
amined by  him  and  all  entirely  cured  within  two  years  from  the  time 
of  settlement. 

In  the  case  of  Sweden,  Dr.  Bihlstrom  has  shown  that  90%  of  all 
such  cases  have  been  cured  within  a  short  space  of  time.  The  prac- 
tice in  Denmark  is  described  by  a  Copenhagen  physician  as  follows : 

"As  soon  as  the  injured  man  is  known  to  be  suffering  from  a  traumatic 
neurosis,  he  is  granted  a  provisional  indemnity — based  on  the  then  existing 
circumstances — of  1,000  marks  on  the  average;  51.9  per  cent  of  all  cases  are 
healed  by  means  of  this  lump  sum  payment.  The  remaining  cases,  from  one  to 
two  years  later,  if  by  reason  of  special  examinations  and  explanations  regard- 
ing the  actual  working  capacity  of  the  injured  a  greater  degree  of  invalidity 
than  originally  assumed  has  been  proved  to  exist,  receive  a  further  final  lump 
sum  of  1,300  marks  on  the  average."! 

By  this  method,  93.6%  of  all  Danish  traumatic  neurosis  cases 
are  cured.  Nothing  like  as  favorable  results  can  be  shown  where 
the  pension  system  is  in  force. 

*Weber;  Westphalian  Alliance  Report,  p.  20.     t"Korrespondenzblatt  fUr  SchweJzer 
Aerzte,"  1910,   No.  2.     JWimmer;   "Zentralblatt  fUr  Nervenhellkunde,"  1910,  p.  117. 

36 


The  following  quotation  bears  on  this  subject: 

"Cures  also  occur  in  countries  where  pension  settlements  are  in  vogue. 
Usually,  however,  pensions  continue  to  V  e  paid  for  many  years  and  a  very  high 
percentage  of  former  patients  draw  their  pensions  so  long  as  they  live.  Thus, 
to  be  specific,  Schaller,  in  an  article  based  on  the  experience  of  the  psychiatric 
clinic  in  Tubingen,  was  only  able  to  report  four  cures  in  43  cases  of  neurosis."* 

The  reasons  for  the  ill  success  of  the  pension  system  in  cases 
of  neurosis  are  set  forth  in  the  following  extracts: 

"The  explanation  of  this  is  to  be  found  herein,  that  a  lump  sum  payment 
does  away  with  the  nervous  strain  brought  on  by  a  suit  for  a  pension.  For  a 
lump  sum  payment  results  in  a  final  determination,  while  an  accident  pension 
[in  Germany]  is  invariably  granted  subject  to  revision.  While  the  one  pen- 
sioned is  continually  under  observation,  the  workman  enjoys  entire  freedom 
of  movement  after  the  making  of  a  lump  sum  payment.  He  is  able  to  con- 
sider himself  again  as  a  well  man,  is  again  able  to  compete  and  acquires  there- 
by, as  well  as  through  his  having  been  placed  in  a  stronger  financial  position, 
the  possibility  of  again  making  his  way  upwards."! 

"In  a  country  which  uses  the  pension  system  of  compensation,  the  un- 
favorable influences  are  forever  in  operation  in  consequence  of  the  many  ex- 
aminations, disputes  with  the  insurance  officials  and,  above  all,  the  wish  not  to 
lose  one's  pension."! 

Some  German  officials  are  advocates  of  the  lump  sum  payment 
system.  We  may  quote  from  the  statements  of  two: 

"All  the  speakers  have  corroborated  the  statement  that  the  same  regret- 
table evils  make  their  appearance  both  in  private  as  well  as  in  a  system  of  so- 
cial insurance.  Private  insurance  has,  however,  this  advantage  that  it  can  act 
promptly  with  a  lump  sum  payment  and  thereby  quickly  put  an  end  to  the  pen- 
sion mania  with  its  dangerous  moral  accompaniments.  On  the  other  hand,  in 
social  insurance  everything  is  much  too  uniformly  made  to  depend  on  the  pen- 
sion system.  *  *  *  I  am  of  the  opinion  that  one  should  make  use  of  lump 
sum  payments  in  the  case  of  pensions  even  much  higher  than  20  per  cent  and 
in  certain  cases,  even  instead  of  pensions  for  temporary  periods."§ 

"I  consider  it  very  desirable  to  make  use  of  lump  sum  payments  to  the 
greatest  possible  extent,  because  the  injured  person  so  settled  with  deems  him- 
self again  an  able-bodied  workman.  In  some  cases  an  existing  hysteria  is  dis- 
pelled to  a  surprising  degree  through  making  a  lump  sum  payment."  U 

Despite  the  sweeping  assertion  of  the  authorities  of  the  imperial 
insurance  office  to  the  contrary,  it  is  clear  from  the  foregoing  that 
the  one  sided  system  of  pension  settlements  in  vogue  in  Germany 
is  in  many  cases  most  undesirable.  Instead  of  helping  to  benefit 
the  sufferers  from  nervous  disorders  due  to  the  occurrence  of  acci- 
dents, regular  pension  payments  merely  aggravate  the  symptoms  and 
often  make  the  troubles  incurable.  German  experience,  therefore, 
does  not  prove  the  superiority  of  the  pension  plan  of  compensation 
for  injured  workmen,  but  rather  that  the  failure  to  make  a  much  more 
widespread  use  of  the  lump  sum  settlement  plan  is  a  serious  imper- 
fection in  the  German  accident  insurance  law.  Indeed,  this  is  fully 
recognized  outside  of  official  circles.  A  commission  is  now  engaged 
in  studying  on  behalf  of  the  employers'  associations  the  question 
whether  it  would  not  be  advisable  to  provide  for  lump  sum  payments 
in  all  cases,  except  where  permanent  disability  results.  That  would 

*NaegeU;  p.  22.  fBernhard;  p.  86.  tNaegell;  p.  20.  §Ste!n;  Westphallan  Alliance 
Report,  p.  30.  Wandel;  Ib.,  p.  19. 

37 


be  a  marked  departure  from  the  now  prevailing  practice  and  is  sig- 
nificant of  the  dissatisfaction  felt  with  it.  As  the  subject  is  as  yet 
merely  being  discussed,  no  immediate  change  in  the  law  in  this  re- 
spect is  to  be  expected. 

Cures  Not  Desired. 

Mention  has  been  made  elsewhere  of  the  refusal  of  the  insured 
when  injured  to  undergo  slight,  harmless  operations.  As  one  learned 
professor  of  medicine  says : 

"The  constantly  increasing  aversion  of  the  insured  to  having  themselves 
made  well  is  a  cause  for  serious  thought.  An  end  must  be  put  to  the  con- 
stantly increasing  fear  and  disinclination  to  allow  an  operation,  even  if  it  be 
the  most  trivial  operative  measure,  and  one  free  from  all  danger."* 

The  same  authority  also  remarks : 

"It  is  a  fact  that  most  of  those  injured  in  accidents,  in  order  not  to  lose 
their  pensions,  hardly  ever  submit,  after  the  13th  week,  to  a  carefully  planned 
mode  of  treatment  and  one  promising  good  results.  Indeed,  one  even  ex- 
periences that  they  categorically  refuse  to  allow  the  employment  of  quite 
simple,  harmless  and  entirely  painless  measures."! 

This  attitude  of  the  insured  is  largely  made  possible  by  the  lack 
of  a  sufficiently  efficacious  provision  in  the  accident  insurance  law 
penalizing  such  actions.  One  paragraph  indeed  allows  a  temporary 
reduction  in  the  amount  of  a  pension  in  such  cases  of  refusal.  But 
judicial  proceedings  have  to  be  brought,  and  as  far  as  restora- 
tion is  concerned  the  delay  is  fatal,  for  to  be  efficacious  the  treat- 
ment must  be  prompt.  By  the  time  the  courts  have  acted,  the  period 
for  successful  treatment  has  gone  by.  The  following  quotation  ex- 
plains why  this  is: 

"Section  606  of  the  imperial  insurance  code  provides,  it  is  true,  that  com- 
pensation can  be  wholly  or  partially  refused  the  injured  person,  for  a  time, 
where  he  declines  to  follow,  without  a  legal  or  any  other  good  reason,  a  direc- 
tion concerning  the  healing  treatment,  if  his  ability  to  work  suffers  thereby 
and  the  provisions  of  the  law  are  called  to  his  attention.  But  the  possible 
chance  of  judicial  proceedings  being  instituted  affords  untractable  persons, 
who  prefer  the  acquiring  of  a  pension  to  the  restoration  of  their  health  and 
working  powers,  an  opportunity  to  delay  proceedings  so  long  that  the  most 
precious  time  for  a  resort  to  medical  measures  is  lost."! 

Furthermore,  the  courts  are  very  unwilling  to  enforce  this  provi- 
sion. As  the  secretary  of  a  miners'  employers'  association  remarks : 

"As  far  as  my  knowledge  goes,  Section  1  of  the  Miners'  Employers'  Asso- 
ciation has  not  succeeded  even  in  one  single  instance  in  having  such  a  reduc- 
tion in  a  pension  sustained  on  appeal,  no  matter  how  slight  the  reduction  may 
have  been."§ 

The  same  official  further  says : 

"After  great  sums  have  been  expended  in  Germany  for  the  equipment  of 
sanitariums  fitted  up  with  modern  and  most  improved  appliances;  after  the 
German  medical  corps  has  understood  how  to  dedicate  itself  with  such  con- 
spicuous success  to  the  duty  devolved  on  it  under  social  insurance  laws;  after 

*R!eder-Bonn;  Westphalian  Alliance  Report,  p.  19.  fib.,  p.  16.  tFlemming;  ib..  p. 
25.  §Ib..  p.  28. 

38 


the  insurers  spend  yearly  many  millions  of  marks  for  restorative  treatment, 
it  does  not  seem  right  to  leave  it  to  the  whim  of  the  insured  workman  to  de- 
cide whether  he  too  shall  make  intelligent  use  or  not  of  these  appliances  con- 
secrated to  the  health  of  the  people." 

Undoubtedly  the  lack  in  the  German  accident  insurance  law  of  a 
suitable  paragraph  under  which  the  insured  can  be  forced,  in  their 
own  best  interests,  to  undergo  the  proper  course  of  treatment  is  a 
serious  omission  as  things  have  turned  out.  But  who  could  have 
foreseen  that  the  insured  would  be  so  blind  as  to  the  best  course  for 
them  to  pursue  and  that  they  would  prefer  infirmity  with  a  perma- 
nent pension  to  being  made  well  and  able  to  work  as  before?  The 
results  of  social  insurance  certainly  appear  in  a  very  curious  light, 
when  money  is  deemed  of  more  importance  than  a  return  to  former 
health,  and  where  the  insured  have  to  be  clubbed,  as  it  were,  by  legal 
measures  into  undergoing  a  proper  course  of  treatment. 

How  the  German  legislators  will  proceed  to  force  the  recalcitrant 
victims  of  accidents  into  line,  it  is  difficult  to  say.  The  most  radical 
remedy  yet  proposed  has  been  the  loss  of  the  pension  in  such  cases ; 
but  its  adoption  is  exceedingly  doubtful.  This  unforeseen  difficulty 
which  the  Germans  have  experienced  in  persuading  the  insured  to 
undergo  the  right  treatment  teaches  again  the  necessity  of  making 
the  question  of  restoration  appear  of  paramount  importance  to  the  vic- 
tims of  accidents.  If  the  chase  of  the  almighty  dollar  is  allowed  to 
take  the  first  place,  very  poor  results  from  a  healing  standpoint  are 
sure  to  follow. 

Over-Insurance  Permitted. 

Encouraging  to  those  inclined  to  prolong  as  far  as  possible  their 
period  of  idleness  after  an  accident  is  the  absence  of  any  provision 
in  the  German  law  forbidding  double  or  over-insurance.  If  a  mem- 
ber of  a  sickness  society,  an  injured  workman  is  entitled  to  half-pay 
from  his  society  during  disability  for  the  first  13  weeks  after  an  acci- 
dent. But  there  is  nothing  to  prevent  him  from  also  insuring  himself 
elsewhere.  As  one  physician  explains : 

"In  the  case  of  some,  the  system  of  double  insurance — which  is  apparently 
very  widespread — helps  to  augment  this  delay  [in  healing].  It  results  in 
wages  being  almost  entirely  made  good,  whereby  the  incentive  to  work  is 
lessened  for  many."* 

It  seems  strange  that  in  spite  of  their  years  of  experience,  the 
Germans  have  not  yet  attempted  to  do  away  with  this  abuse  and  the 
demoralization  it  causes. 

We  may  conclude  our  review  of  the  defects  of  the  German  acci- 
dent insurance  law  with  the  following  suggestion  from  a  competent 
authority : 

"On  the  one  hand,  there  are  expended  yearly  over  one  hundred  million 
marks  for  the  preservation  of  the  health  and  lives  of  the  employed  workmen 
and  workwomen,  especially  for  accident  prevention  in  industrial  occupations  of 
all  kinds.  The  greater  part  of  these  expenditures  falls  upon  the  mining  in- 
dustry, which,  in  the  struggle  with  the  elements  in  the  dark  bosom  of  the 
earth,  has  to  contend  with  especial  difficulties.  These  outlays  are  cheerfully 
^d  gladly  made  for  this  purpose,  and  numerous  public  and  private  bodies  and 

*Peters;   Westphallan  Alliance  Report,  p.  21. 

39 


officials  find  their  life-work  in  devising  proper  accident  preventing  regulations 
and  in  carefully  watching  over  their  conscientious  enforcement." 

"On  the  other  hand,  Section  1,254,  paragraph  2,  of  the  imperial  insurance 
code  provides:  The  violation  of  the  regulations  of  the  mining  police  *  *  * 
is  not  an  offence  within  the  meaning  of  the  present  law.'  In  other  words, 
it  is  immaterial  whether  the  insured,  through  the  non-observance  of  safety 
regulations,  brings  himself  or  his  fellow  woikmen  into  jeopardy;  he  has  the 
same  right  to  compensation  as  the  one  who  unavoidably  perishes  in  the  per- 
formance of  his  work  or  while  conscientiously  observing  safety  regulations. 
A  change  in  the  law  is  here  eminently  in  order,  by  which  at  least  a  small  re- 
duction can  be  effected  in  the  accident  pension  of  the  culpable  party. 
If  the  government  officials  and  German  industry  combined  expend  every  year 
large  sums  for  the  safety  of  the  employed,  the  law  must  provide  a  means  for 
compelling  an  observance  of  these  regulations  by  compensating  the  ones  who 
suffer  injury  through  their  non-observance  less  than  the  ones  who  obey  them 
and  yet  incur  injury."* 

Errors  of  Interpretation  and  Administration. 

The  provisions  of  the  German  accident  insurance  law  heretofore 
discussed  are  thus  to  a  considerable  degree  responsible  for  the  evils 
arising  out  of  the  enactment  of  the  statute.  But  the  existing  abuses 
are  after  all  mainly  due  to  the  false  interpretation  of  the  law  by  the 
officials  and  to  errors  in  its  administration.  This  may  seem  surprising 
in  view  of  the  vaunted  efficacy  and  superiority  of  German  methods, 
but  such  is  the  fact. 

As  one  high  German  official  has  stated : 

"A  further  practical  result  of  the  discussion  appears  to  me  to  have  been 
the  recognition  that  the  law  as  such  is  responsible  for  only  a  small  percentage 
of  the  existing  evils,  while  the  manner  of  its  enforcement  is  responsible  for  the 
major  part.  From  this  the  conclusion  follows  that  we  are  not  obliged  to  resign 
ourselves  to  a  determination  of  the  evils  *  *  *  and  to  call  for  a  change  in 
the  law,  but  that  the  possibility  exists  *  *  *  of  securing  a  reduction  in  the 
unpleasant  consequences  through  an  intelligent  co-operation  of  all  those  in- 
terested."f 

When  the  law  was  originally  proposed,  it  was  to  be  one  of  a 
series  of  contemplated  measures  intended  to  please  the  working  peo- 
ple and  to  appease  their  social  discontent.  It  was  meant  to  have  a 
political  as  well  as  a  remedial  effect.  Hence  the  authorities  felt 
obliged  to  construe  the  law  in  as  liberal  a  spirit  as  possible  and  to 
favor  the  workmen  whenever  possible.  The  far-reaching  effect  of 
erroneous  interpretation  was  in  no  wise  foreseen. 

Typical  of  the  attitude  of  the  officials  is  the  simile  ascribed  to  the 
first  president  of  the  imperial  insurance  office,  wherein  the  workmen 
were  likened  to  children  who  could  best  be  won  by  kindness.  So  the 
idea  was  spread  forth  that  they  should  be  petted  and  indulged  as 
much  as  possible.  The  Germans,  therefore,  started  with  the  notion 
that  every  victim  of  an  accident  ought  to  be  compensated  and  that 
the  letter  of  the  law  required  every  injury  to  be  measured  in  terms  of 
money.  Elaborate  tables  were  prepared,  with  minute  gradations,  cov- 
ering disabilities  of  from  $%  to  100%.  Even  unimportant  finger  hurts 
without  any  serious  consequences  received  the  minimum  rate  of  5%, 
The  workmen  were  quick  to  perceive  that  these  small  pensions  for 

*Flemmlng;  Westphalian  Alliance  Report,  p.  27.     fStocker;  ib.,  p.  31. 

40 


trivial  injuries  could  be  obtained  without  the  slightest  difficulty  and 
the  recipients  of  them  came  to  be  objects  of  envy.  Known  as  "drink- 
money  pensions,"  they  were  much  sought  after,  and  improper  methods 
were  frequently  resorted  to  for  obtaining  them. 

Drink  Money  Pensions. 

In  1897  a  careful  examination  disclosed  the  fact  that  for  dis- 
abilities of  10%  or  under  the  average  pension  paid  was  9  pfennigs  or 
slightly  more  than  2  cents  a  day,  or  just  about  enough  to  purchase 
a  glass  of  beer  or  a  fair  cigar  every  day.  The  knowledge  gleaned 
from  this  investigation,  and  the  very  patent  abuses  and  swindling 
practices  prevalent,  caused  the  authorities  finally  to  take  a  back  track. 
Accordingly,  on  October  5th,  1901,  a  decision  of  the  imperial  insur- 
ance office  was  rendered  in  which  the  precept  was  laid  down  that 
"pensions  of  less  than  10%  are  not  to  be  granted  as  a  rule,  because 
experience  shows  that  degrees  of  disability  taxable  at  less  than  10% 
are  not  regarded  as  a  measurable  loss  in  industrial  life."  But  this 
action  came  too  late — the  virus  of  the  pension  mania  had  already  taken 
hold  of  the  working  population  and  started  on  its  baneful  career. 

If  the  German  officials  hoped  to  check  the  spread  of  unlawful 
practices  by  excluding  minor  injuries  from  the  operation  of  the  law, 
they  were  soon  undeceived.  The  false  conception  originally  fostered 
by  them  of  the  object  of  a  pension  had  become  too  deeply  ingrained 
in  the  minds  of  the  work  people,  who  to-day  are  still  laboring  under 
the  delusion  that  not  proven  loss  in  working  capacity,  but  the  mere 
occurrence  of  an  accident,  is  what  entitles  them  to  a  pension.  As  a 
law  officer  recently  stated : 

"The  false  idea  is  still  running  in  the  heads  of  the  insured  that  the  legal 
compensation  is  a  kind  of  smart-money,  which  can  be  demanded  for  every  ac- 
oident."* 

Another  one  says : 

"Finally,  I  wish  to  mention  those  persons  who  have  received  an  unim- 
portant injury  and  who  at  the  expiration  of  the  waiting  period  can  show  either 
no  diminution  in  working  capacity  or  one  not  worthy  of  notice.  Almost  all  these 
persons  make  a  demand  for  compensation  upon  the  employers'  associations 
without  being  able  to  allege  anything  for  the  foundation  of  their  demands  be- 
yond the  fact  that  they  have  met  with  an  accident.  In  such  cases,  the  object 
sought  after  is  the  small  pensions  ranging  from  10  per  cent  to  20  per  cent.^f 

In  the  recent  consolidation  of  the  various  workingmen's  compen- 
sation laws,  the  higher  officials  went  a  step  further  than  before  and 
proposed  that  it  should  be  permissible  to  grant  pensions  of  20%  or  less 
for  a  definite  fixed  period,  with  no  right  of  appeal  therefrom.  The 
purpose  was,  of  course,  to  exert  some  pressure  on  the  workmen  suf- 
fering from  minor  injuries  so  that  they  would  make  greater  efforts  to 
recover  their  former  working  ability.  Although  a  very  wise  move, 
the  workingmen  were  opposed  to  its  adoption  and  defeated  its  pas- 
sage. In  addition,  the  leading  parties  in  the  Reichstag  joined  in  se- 
verely criticising  the  imperial  insurance  office  because  of  its  attempt- 

*St6cker;  Westphallan  Alliance   Report,  p.  18.     fStahl;  ib.,  p.  13. 

41 


ing  through  its  judicial  instrumentalities  to  do  away  with  the  smaller 
pensions. 

Looking  back  on  this  phase  of  the  interpretation  of  the  German 
accident  insurance  law,  the  point  to  be  emphasized  is  the  necessity 
that  officials  should  have  always  clearly  in  mind  the  main  purpose  of 
such  a  compensation  statute.  Not  realizing  that  it  was  primarily  a 
law  of  partial  reparation  for  the  inevitable  loss  due  to  workingmen's 
accidents,  the  German  men  in  office  began  by  construing  it  more  as 
a  political  measure  intended  to  make  the  workmen  contented  and 
happy.  This  resulted  in  the  dissemination  of  the.  mistaken  idea  that 
the  happening  of  an  accident  carries  with  it  in  all  cases  a  right  to  com- 
pensation, and  the  consequent  spread  of  the  pension  mania.  Once 
started  in  the  wrong  direction,  the  Germans  have  thus  far  not  been 
able  to  return  to  the  right  track.  The  attempt  of  the  higher  authori- 
ties to  make  for  the  correct  course  has  been  largely  nullified  by  party 
politics,  the  action  of  the  minor  .administrative  officials  and  the  deep- 
seated  nature  of  the  pension  disease.  The  importance  of  having  all 
workingmen's  compensation  acts  drafted  and  interpreted  along  proper 
lines  cannot,  therefore,  be  too  strongly  dwelt  upon,  and  should  be  in- 
variably borne  in  mind  in  the  introduction  of  any  new  legislation  of 
this  sort. 

Mistakes  of  Tribunals. 

If  the  head  officials  have  of  recent  years  had  a  correct  under- 
standing of  the  underlying  principles  to  be  followed,  the  same  can- 
not yet  be  asserted  of  the  other  bodies  engaged  in  the  administration 
of  the  law,  and  especially  not  of  the  courts.  Here  faulty  ideas  stil! 
prevail.  To  quote  a  few  authorities : 

"Very  widespread  is  the  struggle  for  these  small  pensions,  which  the 
courts  of  arbitration  with  great  predilection  allow  the  insured  as  habituating 
or  accustoming  pensions.  This  yielding  to  the  efforts  put  forth  for  the  at- 
tainment of  these  small  pensions  is  especially  adapted  to  augment  covetous- 
ness  and  pension  mania.  It  is  far  from  my  thoughts  to  speak  against  a  benevo- 
lent interpretation  of  the  question  of  compensation.  A  benevolent  view  should 
and  ought  to  be  taken,  but  only  where  it  is  in  place,  namely,  in  the  case  of 
severe  injuries."* 

"These  truly  very  undesirable  side-effects  in  the  law  of  accident  insur- 
ance would  be  largely  robbed  of  their  evil  consequences  if  the  judicial  bodies — 
the  higher  courts  of  the  imperial  insurance  office  and  the  courts  of  arbitration 
— would  allow  themselves  to  be  convinced  more  than  formerly  of  the  widespread 
extent  and  of  the  injurious  consequences  of  this  'physiological'  pension  mania, 
and,  before  wasting  their  benevolence  upon  the  unworthy,  would  take  proper 
note  in  every  case,  when  they  come  to  deliver  their  opinions,  of  the  state- 
ments of  the  doctor  in  charge. "f 

"It  is  indispensible  that  these  [judicial]  bodies  should  also  of  themselves' 
realize  that  the  treatment  and  the  restoration  of  the  former  working  cap- 
ability of  an  injured  person  is  the  principal  thing  to  be  attained,  and  that  all 
medical  efforts  in  that  direction  must  be  most  vigorously  supported  by  the  ap- 
propriate officials  of  the  arbitration  and  the  imperial  insurance  office  courts. 
From  my  previous  experiences,  I  can  say  that  this  has  by  no  means  been  the 
case  to  the  proper  extent.  I  must  here  call  attention  to  this  fact,  that  one  can- 

*Stahl;  Westphatian  Alliance  Report,  p.  14.     tRieder-Bcnnr  ib..  p.  16. 

42 


not  by  any  means  approve  when  certain  arbitration  tribunals  often  change  the 
accident  pension  determined  by  the  doctors  by  a  few  (5  per  cent)  in  favor  of 
the  insured.  This  occurs,  unfortunately,  only  too  often  and  without  any  good 
reason.  A  procedure  of  this  kind  only  tends  to  damage  the  prestige  of  the 
treating  physicians  in  the  eyes  of  the  insured  and  to  encourage  them  in  their 
already  sufficiently  obstreperous  conduct  towards  the  doctor  in  charge. 
Furthermore,  I  consider  it  also  as  unjustifiable  when,  as  has  not  seldom  hap- 
pened to  me,  an  arbitration  tribunal  alters  the  rates  of  pensions  on  the  basis 
of  a  single  examination  by  its  confidential  physician,  lasting  only  a  few  min- 
utes, which  rates  we  who  had  a  comprehensive  knowledge  of  the  case  had 
recommended  after  weeks  and  months  of  treatment,  after  consultation  with 
several  doctors  and  after  the  most  careful  and  conscientious  weighing  of  the 
facts."* 

"The  judicial  bodies  can  and  must  follow  in  the  same  groove.  Their  duty 
is  to  strive  for  as  speedy  as  possible  an  ending  to  litigation,  and  also  to  avoid 
furnishing  new  fuel  to  the  covetous  ideas  and  litigiousness  of  the  pension  seek- 
ers through  inconsequential  alterations  in  the  awards  of  the  employers'  associa- 
tions. For  the  reasons  mentioned  by  several  speakers,  the  arbitral  courts  must 
devote  especial  care  to  the  choice  of  the  revising  doctors  and  to  seeing  that 
the  physicians  intended  for  such  duties  possess  really  greater  knowledge  than 
the  specialists  of  the  employers'  associations  in  the  branch  of  medicine  particu- 
larly in  question.  The  caution  was  certainly  justified  against  listening  to 
theorists,  who  were  strangers  to  the  requirements  of  an  active  practice.  In 
order  to  do  away  with  the  mercenary  demand  for  pensions,  it  is  especially  de- 
sirable that  the  judicial  authorities  should  construe  the  law  more  strictly  and 
more  consistently  than  heretofore.  They  must  above  all  things  avoid  helping 
to  spread  the  false  idea  that  the  object  of  a  pension  is  to  furnish  smart-money 
by  allowing  pensions  for  injuries  of  no  consequence  from  an  industrial  stand- 
point. Also,  in  our  opinion,  a  more  critical  appreciation  of  the  medical  reports 
is  in  place  concerning  the  actual  relation  between  an  accident  and  internal  dis- 
orders. It  appears  to  us  only  too  often  as  though  the  'probability  reports,' 
with  their  supposed  state  of  facts  and  logical  train  of  thoughts,  are  not  scrutin- 
ized with;  sufficient  care  by  the  college  of  judges.  It  is  as  clear  as  daylight 
that  a  statutory  construction,  which  does  not  require  a  strict  proof  in  these 
cases,  increases  in  a  dangerous  degree  the  mania,  deplored  by  almost  all  the 
speakers,  for  making  alleged  occupational  accidents  responsible  for  all  sorts 
of  internal  troubles."! 

"I  consider  it  very  deplorable  that  the  trend  of  judicial  decisions  has  been 
to  assume  the  occurrence  of  an  accident  in  the  case  of  internal  diseases,  even 
if  all  especially  unfavorable  occupational  factors  are  wanting,  such  as,  for  ex- 
ample, where  one  suffering  from  hardening  of  the  arteries  receives  an  apoplec- 
tic stroke  while  performing  his  customary  work.  This  might  just  as  well  have 
happened  to  him  while  he  was  at  home  engaged  in  some  harmless  occupation, 
or  indeed  while  he  was  asleep.  This  leads  beyond  all  question  of  doubt  to  an 
occupational  cause  being  asserted  and  assumed  as  proven  in  the  case  of  those 
suffering  from  internal  disorders,  such  as  diseased  lungs  for  example,  when 
it  [the  occupation]  has  played  absolutely  no  part  in  originating  or  in  develop- 
ing the  disease."! 

"The  efforts  of  the  insurers  and  of  the  doctors  to  perfect  the  methods  of 
restorative  treatment  as  far  as  possible,  and  especially  to  put  into  practical 
effect  the  excellent  instructions  of  the  imperial  insurance  office  on  this  sub- 
ject, have  only  then  a  prospect  of  success  if  the  opposition  thereto  of  certain 
of  the  insured  can  be  overcome.  In  this  matter,  the  imperial  insur- 

ance office  could  act  very  beneficially  if  it  would  request  its  courts  and  the 
courts  of  arbitration  to  dispose  of  all  such  matters  [where  treatment  is  re- 
fused] by  as  fast  a  procedure  as  possible.  *  *  *  To-day  in  such  cases,  re- 
port after  report  is  demanded,  and  not  the  carefully  thought  out  directions  of 
the  imperial  insurance  office,  but  the  individual  judgment  of  the  persons  who 
have  to  decide  each  particular  case  are  controlling."§ 

*Rieder-Bonn;  Westphalian  Alliance  Report,  p.  18.  tStocker;  ib.,  p.  31.  tWeber;- 
fb.,  p.  20.  §Flemmlng;  Ib.,  p.  25. 

43 


"The  presiding  officer  in  Hamburg  referred  to  a  crass  case,  where  the  pre- 
tended injured  man  obtained  2,000  marks  by  swindling  methods  and  was  fined 
merely  150  marks.  One  must  energetically  protest  against  such  decisions. 
*  *  *  From  my  own  experience,  I  am  obliged  to  conclude  that  many  judges 
lack  the  proper  insight  into  the  disastrous  effects,  from  a  general  public 
standpoint,  of  the  telling  of  lies  for  the  attainment  of  pensions."* 

From  the  foregoing  statements — all  made  by  men  high  in  au- 
thority and  friends  of  social  insurance — a  good  idea  can  be  obtained 
of  the  shortcomings  of  the  courts  engaged  in  administering  the  Ger- 
man accident  insurance  statute.  In  place  of  a  strict,  vigorous  en- 
forcement of  the  law  and  the  rejection  of  all  seriously  doubtful  claims. 
we  find  the  judicial  officials  weakly  yielding  to  and  favoring  the  de- 
mands of  the  insured.  Uncalled  for  pensions  are  allowed  where  only 
slight  injuries  have  resulted  from  accident,  and  the  occurrence  of 
an  accident  is  assumed  or  inferred  from  wholly  insufficient  evidence, 
where  disability  is  almost  certainly  due  to  some  internal  disease.  In 
their  construction  the  courts  evidently  feel  still  bound  to  adhere  to 
former  precedents  adopted  when  a  benevolent  interpretation  was 
deemed  the  proper  thing.  Hence  the  hesitancy  in  imposing  adequate 
fines  in  cases  of  fraud  and  simulation,  and  the  readiness  to  increase  the 
workmen's  pension  on  appeal  even  though  it  be  but  by  a  paltry  5% 
Instead  of  relying  on  the  report  of  the  attending  physician  for 
the  medical  features  of  a  case,  the  favorite  practice  seems  to  be  to 
obtain  a  multiplicity  of  reports  and  to  be  largely  governed,  when  it 
comes  to  making  a  decision,  by  the  statement  of  some  pet  medical 
adviser.  This  profusion  of  documents  with  accompanying  diversity  of 
opinions  is  doubtless  one  reason  why  the  courts  do  not  dispose  of  ap- 
peals more  quickly  and  why  they  have  fallen  so  far  behind-hand  in 
their  calendars. 

On  its  judicial  side,  therefore,  the  German  accident  insurance  law 
is  not  being  administered  with  anything  like  the  requisite  promptness 
or  efficiency.  Long  delays  and  involved  procedure  are  the  rule.  The 
striking  fact  is  the  independence  of  the  courts  and  the  lack  of  team 
work  between  them  and  the  higher  directing  officials  of  the  imperial 
insurance  office.  While  in  Belgium  the  department  in  charge  of  the 
accident  insurance  statute  enforces  uniformity  in  the  interpretation  of 
the  law  by  means  of  ministerial  circulars,  the  rules  of  guidance  laid 
down  in  Germany  by  the  imperial  insurance  office  are  frequently  nulli- 
fied by  the  action  of  the  courts.  The  two  branches  often  work  at  cross 
purposes;  and  for  this  the  German  law  itself  is  responsible.  One  of 
the  legal  advisers  of  the  imperial  insurance  office  explains  this  as 
follows : 

"One  question  is  still  to  be  determined:  Can  the  imperial  insurance  office 
bring  about  a  change  in  the  administration  of  the  law  by  means  of  a  circular 
addressed  to  its  courts  and  to  the  courts  of  arbitration?  I  believe  this  way 
is  closed  by  the  law  itself.  The  imperial  insurance  office  can  only  exert  an 
influence  on  the  other  insurance  bodies  through  its  principles  being  inculcated 
by  means  of  judicial  decisions."! 

Thus  hampered,  the  imperial  insurance  office  is  not  in  a  positiom 

*Bracht;  Westphalian  Alliance  Report,  p.  29.    fib. 

44 


to  directly  enforce  its  views  on  the  courts,  and,  before  those  views  can 
become  controlling,  must  await  the  adoption  of  its  opinions  by  the  law- 
naking  branches. 

Harmful  Publicity  to  Physicians'  Reports. 

Another  provision  of  the  German  law,  which  is  too  indulgently 
interpreted,  is  that  allowing  the  insured  to  know  the  main  feature  of 
the  physician's  reports  concerning  their  condition.  The  practice  in 
vogue  is  described  in  the  following  quotations : 

"Where,  under  the  terms  of  the  law,  the  right  of  the  insured  to  obtain 
copies  of  medical  reports  and  analogous  matters  is  clearly  defined,  the  judicial 
proceedings  required  afford,  nevertheless,  an  opportunity  of  avoiding  unpleas- 
ant consequences.  For  in  Section  1607,  it  is  distinctly  stated  that  copies  are 
only  to  be  given  out  in  so  far  as  a  consideration  of  the  state  of  the  one  entitle'd 
thereto  warrants.  For  example,  if  an  unfavorable  prognosis  is  expressed  in 
the  report  about  the  future  course  of  the  illness,  this  can  naturally  exert  a 
very  unfavorable  influence  on  the  patient's  state  of  mind.  I  therefore  con- 
sider it  exceedingly  dangerous  to  make  known  in  such  cases,  either  orally  or 
in  writing,  the  contents  of  the  report  in  such  a  detailed  fashion  as  is  frequently 
done  to-day.  In  looking  through  medical  reports,  which  were  made  out 
months  before,  the  injured  man  striving  for  a  pension  recalls  often  ailments 
and  subjective  ills,  which  he  had  forgotten  long  ago.  In  the  case  of  the  nerv- 
ously enfeebled  or  those  weak  in  character,  the  continued  giving  out  of  medi- 
cal opinions  concerning  their  ailments  works  very  unfavorably.  This  occurs 
at  two  different  stages  in  the  imperial  insurance  office — once  before  the 
courts  of  arbitration  and  again  before  the  highest  court.  The  mere  naming 
of  some  ailments  can  in  certain  instances  prove  only  too  fatal  for  the  family 
happiness.  *  *  *  The  judicial  officers  could  simplify  their  proceedings  in 
this  respect  and  still  keep  within  the  letter  of  the  law."* 

"I  desire  to  refer  to  a  matter  which  does  much  to  increase  the  cases  of 
simulation,  namely,  the  provision  that  the  main  features  of  the  medical  re- 
ports are  to  be  made  known  to  those  injured.  Generally  it  is  so  observed  that 
they  are  given,  upon  their  demanding  it,  a  full  copy  of  the  report.  In  such 
instances  I  have  often  observed  that  injured  persons  whom  I  have  myself 
reported  upon  and  treated  complained  at  the  next  examination  about  troubles 
and  showed  alleged  symptoms  which  were  certainly  absent  before  and  which, 
as  a  matter  of  fact,  were  even  then  non-existent.  They  had  learned  about 
them  through  the  medical  reports.  Every  medical  examiner  can  confirm  the 
same  fact  a  hundred  times  and  a  change  in  this  provision  appears  most  essen- 
tial. This  change  is  also  necessary  for  the  reason  that  it  is  in  the  interest  of 
the  injured  themselves,  because  they  derive  from  the  report  a  prognosis  and 
information  regarding  the  nature  of  their  ailment  which  is  qualified  to  cause 
a  severe  mental  depression.  This  was  certainly  not  within  the  intention  of 
the  lawmakers."! 

It  is  evident  from  the  foregoing  that  the  officials  are  acting  from  a 
mistaken  sense  of  kindness  in  furnishing  with  such  liberality  to  the 
insured  copies  of  the  medical  reports  concerning  their  condition.  A 
broad  construction  of  the  provision  in  question  is  out  of  place,  for  the 
result  is  ordinarily  to  unfavorably  affect  the  mental  state  of  the  honest 
workman  and  to  put  additional  weapons  for  fraudulent  practices  in  the 
hands  of  the  dishonest.  The  natural  query  also  arises  why  the  contents 
of  confidential  medical  reports,  submitted  to  a  court  for  its  guidance  by 
its  trusted  medical  adviser  as  a  rule,  should  be  revealed  at  all.  Their 

*Flemming;  Westphallan  Alliance   Report,  p.  26.     tBecker;  Ib.,  p.  23. 

45 


primary  object  is  to  inform  the  court,  but,  if  made  public  and  un- 
favorable to  the  claimant's  side,  the  natural  desire  is  to  contest  them. 
This  leads  to  new  reports  and  protracted  proceedings,  while  public 
policy  requires  above  all  things  a  quick  and  speedy  adjustment  of  work- 
ingmen's  claims  for  compensation  in  accident  cases. 

Mistaken  Policy  of  Some  Employers. 

If  the  charge  is  justified  that  the  German  officials  too  indulgently 
interpret  the  accident  insurance  law  where  the  workingmen's  interests 
are  concerned,  the  same  lenity  towards  their  injured  laborers  is  dis- 
played by  many  employers.  To  use  the  language  of  a  government  rep- 
resentative : 

"In  the  industrial  employers'  associations — in  particular  those  with  small 
or  moderate  sized  establishments — the  employers  themselves  transgress  by 
shielding  their  injured  laborers  too  much.  One  wishes  to  be  especially  kind 
to  one's  own  fnjured  laborer  and  feels  that,  if  premiums  have  been  paid  so 
long  a  time,  one  ought  to  assist  him  in  obtaining  an  indemnity  and  in  retain- 
ing it  for  as  long  a  time  as  possible.  Indeed,  from  the  reports  regarding 
wages  and  conditions  of  employment  which  the  associations  are  accustomed 
to  call  for,  one  often  receives  the  impression  as  though  the  employer  was  seek- 
ing to  make  a  profit  out  of  the  accident  through  giving  an  exaggerated  ac- 
count of  the  diminution  in  working  powers  and  thus  retaining  for  himself  a 
low  priced  workman,  that  is,  one  that  is  paid  too  little  after  an  accident  and 
not  according  to  his  real  working  capacity."* 

The  shortsightedness  of  such  a  policy  need  not  be  dwelt  upon ; 
but  such  practices  would  be  largely  obviated  if  the  law  were  strict- 
ly construed  and  actual  loss  in  working  capacity  made  the  standard 
of  indemnity  in  all  cases.  If  unable  to  conceal  the  fact,  the  workman 
receiving  a  larger  compensation  than  the  state  of  his  injuries  warrants 
profits  little  in  the  end,  for  his  employer  merely  reduces  the  amount 
of  his  daily  wages  accordingly.  The  same  phenomenon  is  to  be  ob- 
served in  Holland,  where  indemnities  are  graded  according  to  anatom- 
ical defects  and  not  purely  and  simply  according  to  loss  in  earning 
power. 

Injudicious  Method  in  Police  Investigations. 

When  a  workman  meets  with  a  mishap  during  the  course  of  his 
employment  and  is  incapacitated  wholly  or  partly  for  more  than  three 
days,  the  fact  must  be  reported  to  the  local  police,  who  thereupon  con- 
duct an  inquiry  into  the  cause  of  the  accident.  A  criticism  of  the  police 
method  of  conducting  this  inquiry  is  contained  in  the  following  re- 
marks of  a  manager  of  a  large  German  brewery : 

"Attention  should  also  be  called  to  a  matter,  which  should  not  be  ignored 
in  the  list  of  factors  helping  to  spread  the  pension  mania.  That  is  the  method 
followed  by  the  lower  police  organizations  in  the  case  of  accident  investiga- 
tion. Only  read  through  the  reports.  Even  if  the  simplest  kinds  of  bodily 
hurts  are  in  question,  which,  according  to  well-known  experience,  result  in 
no  appreciable  diminution  in  working  capacity  at  the  end  of  the  waiting  period, 
again  and  again  is  the  injured  man  asked  at  the  close  of  his  examination,  'Do 
you  claim  an  indemnity?'  As  a  matter  of  course,  this  question  is  always  an- 
swered in  the  affirmative.  If  these  demands  for  compensation  are  often  made 
when  there  is  absolutely  no  ground  for  them  so  that  they  possess  no  material 

*K6nen;  Westphalian   Alliance  Report,  p.  24. 

46 


disadvantages  for  the  associations,  nevertheless  this  declaration  of  the  injured 
person  is  the  moving  cause  for  disputes  to  arise,  the  warding  off  of  which  is  to 
be  regarded  as  a  very  unpleasant  phase  of  our  social  work.  The  fulfilment  of 
the  duty  imposed  on  us  by  law — to  look  out  that  the  injured  workman  re- 
acquires  the  highest  possible  percentage  of  his  former  working  capacity — is 
made  appreciably  more  difficult  and  often  all  but  impossible  through  his 
obstreperous  attitude,  dating  from  that  time  [of  examination],  and  assumed 
towards  our  measures  directed  to  the  preservation  and  restoration  of  his  work- 
ing capacity.  The  root  of  the  evil  is  the  inquiry  of  the  police  whether  an 
indemnity  is  demanded.  For  without  doubt,  the  thought  of  an  indemnity  would 
never  have  arisen  in  the  case  of  the  majority  of  those  injured  in  accidents 
if  it  had  not  been  aroused  by  the  question  of  the  examining  police  official."* 

Thus  at  the  very  start  of  German  accident  procedure,  the  attention 
of  the  victim  is  directed  to  the  possibility  of  obtaining  a  money  in- 
demnity. Irrespective  of  the  degree  of  injury,  the  same  question  is 
always  asked  whether  compensation  is  expected.  No  wonder,  there- 
fore, at  the  insured  laboring  under  the  delusion  that  smart-monjey 
goes  with  every  accident  no  matter  how  trivial  and  paying  more  at- 
tention to  obtaining  compensation  than  to  the  all  important  matter  of 
getting  well.  Great  evils  can  often  be  traced  to  small  causes  and  this  is 
true  of  the  question  as  to  indemnity  required  to  be  answered  in  the 
German  police  reports.  Even  the  minutest  details  must  be  looked  out 
for,  therefore,  in  the  operation  of  a  workingmen's  compensation  law,  if 
abuses  would  be  avoided. 

Conclusion. 

In  the  foregoing,  a  brief  sketch  has  been  attempted  of  the  mistakes 
made  in  the  drafting  of  the  German  accident  insurance  law  and  in  its 
administration  and  interpretation.  The  reforms  called  for  to  do  away 
with  these  evils  have  also  been  described  and  it  will  hardly  be  neces- 
sary to  enumerate  them  again.  Perhaps  the  most  important  are  the 
abolishment  of  the  handling  of  accident  cases  by  the  sickness  societies 
and  the  abrogation  of  the  workmen's  right  to  appeal  free  of  cost.  It  is 
to  be  hoped  that  all  the  reforms  proposed  will  sooner  or  later  come  into 
effect,  but  thus  far  little  headway  has  been  made  towards  their  intro- 
duction. As  like  causes  generally  produce  like  effects,  German  experi- 
ence in  the  compulsory  insurance  of  workingmen's  accidents  should  be 
carefully  borne  in  mind  by  all  investigators  of  social  insurance  so  that 
the  errors  committed  will  not  be  repeated  when  it  comes  to  the  enact- 
ment of  new  legislation  along  similar  lines. 

In  conclusion,  we  cannot  do  better  than  to  quote  the  thoughtful 
criticism  of  a  leading  Berlin  professor  on  the  German  system  : 

"The  desire  to  derive  a  profit  from  an  accident  is  so  human  that  a  promi- 
nent physician  has  designated  such  'enrichment  ideas'  as  'entirely  normal  oc- 
currences even  in  the  case  of  the  best  of  our  people.'  " 

"The  real  danger  lies  herein,  however,  that  one  threw  open  a  wide  field 
to  this  human  weakness  when  one  compulsorily  introduced  the  system  of  pen- 
sion insurance  and  when  one — partly  out  of  ignorance  and  partly  from  a  wish 
to  win  the  masses — neglected  necessary  safeguards  and  gave  a  cast  to  gov- 
ernment pension  insurance  which  is  just  provocative  of  abuses."! 

*Mauritz;   Westphalian   Alliance    Report,   p.   30.      fBernhard;   p.  47. 

47 


BIBLIOGRAPHY  OF  PRINCIPAL  AUTHORITIES. 


Amtliche  Nachrichten  des  Reichsversicherungsamts.     1885-1913. 

Jahresberichte  der  gewerblichen  Berufsgenossenschaften  tiber  Unfallver- 
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Das    Reichsversicherungsamt    und    die    Deutsche    Arbeiterversicherung. 
Berlin,  Behrend  &  Co.    1910. 

Kommentar    zur    Reichsversicherungsordnung.      Berlin.      Carl    Heymann. 
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25  Jahre  Unfallverhutung.    Berlin.    A.  Seydel.  1910. 

Die  Landwirtschaftliche  Versicherung  im  Deutschen   Reiche.     1888-1908. 
Berlin,  Behrend  &  Co.     1911. 

Unerwunschte  Folgen  der  deutschen  Sozialpolitik  von  Prof.  Ludwig  Bern- 
liard.    Berlin.    Julius  Springer.    1913. 

Ueber  den  Einfluss  von  Rechtsanspruchen  bei  Neurosen  von  Prof.  Otto 
Naegeli.    Leipzig.    Veit  &  Co.     1913. 

Bericht  ueber  die  Versammlung  der  Westfalischen  Vereinigung  berufsge- 
•ossenschaftlicher  Verwaltungen.     Dortmund.     W.  Truwell.     1913. 


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